Saratoga Investment Corp.
SARATOGA INVESTMENT CORP. (Form: 10-Q, Received: 07/15/2013 16:46:07)

Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x

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

 

For the Quarterly Period Ended May 31, 2013

 

o

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

 

Commission File Number: 1-33376

 

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 No.)

 

535 Madison Avenue
New York, New York

 

10022

(Address of principal executive office)

 

(Zip Code)

 

(212) 906-7800

(Registrant’s telephone number, including area code)

 

Not applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

 

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 x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o No o

 

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

 

Large Accelerated Filer o

 

Accelerated Filer o

 

 

 

Non-Accelerated Filer x

 

Smaller Reporting Company o

 

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

 

The number of shares of the registrant’s common stock, $0.001 par value, outstanding as of July 15, 2013 was 4,730,116.

 

 

 



Table of Contents

 

TABLE OF CONTENTS

 


 

 

 

Page

 

 

 

PART I

FINANCIAL INFORMATION

3

 

 

 

Item 1.

Financial Statements

3

 

 

 

 

Consolidated Statements of Assets and Liabilities as of May 31, 2013 (unaudited) and February 28, 2013

3

 

 

 

 

Consolidated Statements of Operations for the three months ended May 31, 2013 and 2012 (unaudited)

4

 

 

 

 

Consolidated Schedules of Investments as of May 31, 2013 (unaudited) and February 28, 2013

5

 

 

 

 

Consolidated Statements of Changes in Net Assets for the three months ended May 31, 2013 and 2012 (unaudited)

7

 

 

 

 

Consolidated Statements of Cash Flows for the three months ended May 31, 2013 and 2012 (unaudited)

8

 

 

 

 

Notes to Consolidated Financial Statements as of May 31, 2013 (unaudited)

9

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

27

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

41

 

 

 

Item 4.

Controls and Procedures

41

 

 

 

PART II

OTHER INFORMATION

41

 

 

 

Item 1.

Legal Proceedings

41

 

 

 

Item 1A.

Risk Factors

41

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

41

 

 

 

Item 3.

Defaults upon Senior Securities

41

 

 

 

Item 4.

Mine Safety Disclosures

42

 

 

 

Item 5.

Other Information

42

 

 

 

Item 6.

Exhibits

42

 

 

 

Signatures

43

 

2



Table of Contents

 

PART I FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Saratoga Investment Corp.

 

Consolidated Statements of Assets and Liabilities

 

 

 

As of

 

 

 

May 31, 2013

 

February 28, 2013

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Investments at fair value

 

 

 

 

 

Non-control/non-affiliate investments (amortized cost of $140,710,469 and $130,465,086, respectively)

 

$

141,254,519

 

$

129,563,428

 

Control investments (cost of $17,657,435 and $18,944,966 respectively)

 

23,584,582

 

25,516,959

 

Total investments at fair value (amortized cost of $158,367,904 and $149,410,052 respectively)

 

164,839,101

 

155,080,387

 

Cash and cash equivalents

 

31,555,038

 

149,025

 

Cash and cash equivalents, reserve accounts

 

4,812,160

 

12,086,142

 

Interest receivable, (net of reserve of $114,742 and $53,543, respectively)

 

2,152,892

 

2,889,358

 

Due from manager

 

4,929

 

 

Deferred debt financing costs, net

 

4,494,124

 

2,090,184

 

Management fee receivable

 

215,821

 

215,853

 

Other assets

 

147,763

 

83,407

 

Receivable from unsettled trades

 

8,064

 

1,817,074

 

Total assets

 

$

208,229,892

 

$

174,411,430

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

Revolving credit facility

 

$

 

$

24,300,000

 

SBA debentures payable

 

40,000,000

 

36,000,000

 

Notes payable

 

48,300,000

 

 

Management and incentive fees payable

 

6,067,160

 

4,509,322

 

Accounts payable and accrued expenses

 

673,106

 

435,038

 

Interest and debt fees payable

 

484,287

 

257,796

 

Due to manager

 

218,727

 

222,513

 

Total liabilities

 

$

95,743,280

 

$

65,724,669

 

 

 

 

 

 

 

NET ASSETS

 

 

 

 

 

Common stock, par value $.001, 100,000,000 common shares authorized, 4,730,116 and 4,730,116 common shares issued and outstanding, respectively

 

$

4,730

 

$

4,730

 

Capital in excess of par value

 

174,824,076

 

174,824,076

 

Distribution in excess of net investment income

 

(22,053,262

)

(24,522,951

)

Accumulated net realized loss from investments and derivatives

 

(46,760,127

)

(47,289,427

)

Net unrealized appreciation on investments and derivatives

 

6,471,195

 

5,670,333

 

Total Net Assets

 

112,486,612

 

108,686,761

 

 

 

 

 

 

 

Total liabilities and Net Assets

 

$

208,229,892

 

$

174,411,430

 

 

 

 

 

 

 

NET ASSET VALUE PER SHARE

 

$

23.78

 

$

22.98

 

 

See accompanying notes to consolidated financial statements.

 

3



Table of Contents

 

Saratoga Investment Corp.

 

Consolidated Statements of Operations

 

 

 

For the three months
ended May 31, 2013

 

For the three months
ended May 31, 2012

 

 

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

INVESTMENT INCOME

 

 

 

 

 

Interest from investments

 

 

 

 

 

Non-control/Non-affiliate investments

 

$

4,045,585

 

$

2,064,985

 

Control investments

 

1,126,004

 

1,045,785

 

Total interest income

 

5,171,589

 

3,110,770

 

Interest from cash and cash equivalents

 

1,906

 

2,846

 

Management fee income

 

498,091

 

499,840

 

Other income

 

346,176

 

5,726

 

Total investment income

 

6,017,762

 

3,619,182

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

Interest and debt financing expenses

 

1,127,855

 

625,703

 

Base management fees

 

736,716

 

458,808

 

Professional fees

 

331,064

 

345,839

 

Administrator expenses

 

250,000

 

250,000

 

Incentive management fees

 

821,122

 

430,271

 

Insurance

 

119,995

 

130,307

 

Directors fees and expenses

 

51,000

 

51,000

 

General & administrative

 

98,361

 

51,341

 

Other expense

 

11,960

 

3,123

 

Total expenses

 

3,548,073

 

2,346,392

 

 

 

 

 

 

 

NET INVESTMENT INCOME

 

2,469,689

 

1,272,790

 

 

 

 

 

 

 

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

 

 

 

 

 

Net realized gain from investments

 

529,300

 

178,630

 

Net realized loss from derivatives

 

 

(131,000

)

Net unrealized appreciation on investments

 

800,862

 

1,739,422

 

Net unrealized appreciation on derivatives

 

 

130,925

 

Net gain on investments

 

1,330,162

 

1,917,977

 

 

 

 

 

 

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

 

$

3,799,851

 

$

3,190,767

 

 

 

 

 

 

 

WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE

 

$

0.80

 

$

0.82

 

 

 

 

 

 

 

WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC AND DILUTED

 

4,730,116

 

3,876,661

 

 

See accompanying notes to consolidated financial statements.

 

4



Table of Contents

 

Saratoga Investment Corp.

 

Consolidated Schedule of Investments

 

May 31, 2013

(unaudited)

 

Company (a)

 

Industry

 

Investment Interest Rate / Maturity

 

Principal/
Number of Shares

 

Cost

 

Fair Value (c)

 

% of
Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-control/Non-affiliated investments - 125.5% (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coast Plating, Inc. (d)

 

Aerospace

 

First Lien Term Loan
11.70% Cash, 9/13/2014

 

$

2,528,759

 

$

2,465,034

 

$

2,465,034

 

2.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coast Plating, Inc. (d)

 

Aerospace

 

First Lien Term Loan
12.45% Cash, 9/13/2014

 

$

942,087

 

918,346

 

918,346

 

0.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Aerospace

 

 

 

3,383,380

 

3,383,380

 

3.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Truck Protection Co., Inc. (d), (g)

 

Automotive

 

Common Stock

 

589

 

500,000

 

601,258

 

0.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Truck Protection Co., Inc. (d)

 

Automotive

 

First Lien Term Loan
15.50% (13.50% Cash/2.00% PIK), 8/10/2017

 

$

5,500,000

 

5,471,119

 

5,471,119

 

4.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Take 5 Oil Change, L.L.C. (d)

 

Automotive

 

First Lien Term Loan
9.00% Cash, 11/28/2016

 

$

6,000,000

 

6,000,000

 

6,000,000

 

5.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Take 5 Oil Change, L.L.C. (d)

 

Automotive

 

First Lien Term Loan
13.00% Cash, 11/28/2016

 

$

2,000,000

 

1,964,333

 

2,000,000

 

1.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Take 5 Oil Change, L.L.C. (d), (g)

 

Automotive

 

Common Stock

 

7,128

 

712,800

 

804,894

 

0.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Automotive

 

 

 

14,648,252

 

14,877,271

 

13.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy Cabinets Holdings (d), (g)

 

Building Products

 

Common Stock Voting A-1

 

2,535

 

220,900

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy Cabinets Holdings (d), (g)

 

Building Products

 

Common Stock Voting B-1

 

1,600

 

139,424

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy Cabinets, Inc. (d)

 

Building Products

 

First Lien Term Loan
7.25% (1.00% Cash/6.25% PIK), 5/3/2014

 

$

337,235

 

337,234

 

294,608

 

0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Building Products

 

 

 

697,558

 

294,608

 

0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dispensing Dynamics International (d)

 

Business Services

 

Senior Secured Note
12.50% Cash, 1/1/2018

 

$

7,000,000

 

6,866,531

 

7,315,000

 

6.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Easy Ice, LLC (d)

 

Business Services

 

First Lien Term Loan 14.00% (11.00% Cash 3.00% PIK), 3/29/2018

 

$

7,338,378

 

7,197,495

 

7,338,378

 

6.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emily Street Enterprises, L.L.C. (d)

 

Business Services

 

Senior Secured Note
14.00% (13.00% Cash/1.00% PIK), 12/28/2017

 

$

5,724,425

 

5,620,102

 

5,724,426

 

5.1

%

 

 

`

 

`

 

 

 

 

 

 

 

 

 

Emily Street Enterprises, L.L.C. (d), (g)

 

Business Services

 

Warrant Membership Interests

 

49,318

 

400,000

 

463,589

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Knowland Technology Holdings, L.L.C. (d)

 

Business Services

 

First Lien Term Loan
11.00% Cash, 11/29/2017

 

$

6,200,000

 

6,088,495

 

6,200,000

 

5.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vector Controls Holding Co., LLC (d)

 

Business Services

 

First Lien Term Loan, 14.00% (12.00% Cash, 2.00% PIK), 3/6/2018

 

$

9,570,581

 

9,389,157

 

9,570,581

 

8.5

%

.

 

 

 

 

 

 

 

 

 

 

 

 

 

Vector Controls Holding Co., LLC (d), (g)

 

Business Services

 

Warrants to Purchase Limited Liability Company Interests

 

101

 

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Business Services

 

 

 

35,561,780

 

36,611,974

 

32.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Targus Group International, Inc. (d)

 

Consumer Products

 

First Lien Term Loan
11.00% Cash, 5/24/2016

 

$

3,930,007

 

3,882,605

 

3,900,532

 

3.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Targus Holdings, Inc. (d)

 

Consumer Products

 

Unsecured Note
10.00% PIK, 6/14/2019

 

$

2,047,391

 

1,914,341

 

1,143,687

 

1.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Targus Holdings, Inc. (d)

 

Consumer Products

 

Unsecured Note
16.00% Cash, 10/26/2018

 

$

344,773

 

338,861

 

318,156

 

0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Targus Holdings, Inc. (d), (g)

 

Consumer Products

 

Common Stock

 

62,413

 

566,765

 

3,123,771

 

2.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Consumer Products

 

 

 

6,702,572

 

8,486,146

 

7.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CFF Acquisition L.L.C. (d)

 

Consumer Services

 

First Lien Term Loan
7.50% Cash, 7/31/2015

 

$

1,798,016

 

1,701,650

 

1,798,016

 

1.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expedited Travel L.L.C. (d)

 

Consumer Services

 

First Lien Term Loan
12.00% Cash, 12/28/2017

 

$

4,767,500

 

4,669,337

 

4,767,500

 

4.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PrePaid Legal Services, Inc. (d)

 

Consumer Services

 

First Lien Term Loan
11.00% Cash, 12/31/2016

 

$

3,000,000

 

2,941,006

 

3,000,000

 

2.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Consumer Services

 

 

 

9,311,993

 

9,565,516

 

8.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M/C Acquisition Corp., L.L.C. (d)

 

Education

 

First Lien Term Loan
1.00% Cash, 6/28/2013

 

$

2,888,564

 

1,586,846

 

469,540

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M/C Acquisition Corp., L.L.C. (d), (g)

 

Education

 

Class A Common Stock

 

544,761

 

30,242

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Education

 

 

 

1,617,088

 

469,540

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group Dekko, Inc. (d)

 

Electronics

 

Second Lien Term Loan
11.00% (10.00% Cash/1.00% PIK), 5/1/2016

 

$

6,848,480

 

6,848,480

 

6,765,613

 

6.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Electronics

 

 

 

6,848,480

 

6,765,613

 

6.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

USS Parent Holding Corp. (d), (g)

 

Environmental

 

Non Voting Common Stock

 

765

 

133,002

 

169,759

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

USS Parent Holding Corp. (d), (g)

 

Environmental

 

Voting Common Stock

 

17,396

 

3,025,798

 

3,862,012

 

3.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Environmental

 

 

 

3,158,800

 

4,031,771

 

3.6

%

 



Table of Contents

 

Company (a)

 

Industry

 

Investment Interest Rate / Maturity

 

Principal/
Number of Shares

 

Cost

 

Fair Value (c)

 

% of
Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DS Waters of America, Inc. (d)

 

Food and Beverage

 

First Lien Term Loan
10.50% Cash, 8/29/2017

 

$

3,960,000

 

3,983,258

 

4,039,200

 

3.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOA Restaurant Group, L.L.C. (d)

 

Food and Beverage

 

Senior Secured Note
11.25% Cash, 4/1/2017

 

$

4,000,000

 

3,902,304

 

3,920,000

 

3.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TB Corp. (d)

 

Food and Beverage

 

First Lien Term Loan
5.81% Cash, 6/19/2018

 

$

5,153,506

 

5,129,843

 

5,114,339

 

4.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TB Corp. (d)

 

Food and Beverage

 

Unsecured Note
13.50% (12.00% Cash/1.50% PIK), 12/20/2018

 

$

2,513,884

 

2,479,190

 

2,513,884

 

2.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TM Restaurant Group L.L.C. (d)

 

Food and Beverage

 

First Lien Term Loan
7.75% Cash, 7/16/2017

 

$

2,901,940

 

2,883,980

 

2,896,426

 

2.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Food and Beverage

 

 

 

18,378,575

 

18,483,849

 

16.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oceans Acquisition, Inc. (d)

 

Healthcare Services

 

First Lien Term Loan
9.03% Cash, 12/27/2017

 

$

7,500,000

 

7,359,190

 

7,500,000

 

6.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maverick Healthcare Group (d)

 

Healthcare Services

 

First Lien Term Loan
10.75% Cash, 12/31/2016

 

$

4,887,500

 

4,827,286

 

4,887,500

 

4.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Healthcare Services

 

 

 

12,186,476

 

12,387,500

 

11.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

McMillin Companies L.L.C. (d), (g)

 

Homebuilding

 

Senior Secured Note
0% Cash, 12/31/2013

 

$

550,000

 

543,209

 

344,355

 

0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Homebuilding

 

 

 

543,209

 

344,355

 

0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Worldwide Express Operations, L.L.C. (d)

 

Logistics

 

First Lien Term Loan
7.50% Cash, 6/30/2013

 

$

6,074,502

 

6,058,535

 

6,074,502

 

5.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Logistics

 

 

 

6,058,535

 

6,074,502

 

5.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Elyria Foundry Company, L.L.C. (d)

 

Metals

 

Senior Secured Note 17.00% (13.00% Cash/4.00% PIK), 9/14/2014

 

$

8,801,913

 

8,801,913

 

7,426,174

 

6.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Elyria Foundry Company, L.L.C. (d), (g)

 

Metals

 

Warrants to Purchase Limited Liability Company Interests (2008)

 

5,000

 

20

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Elyria Foundry Company, L.L.C. (d), (g)

 

Metals

 

Warrants to Purchase Limited Liability Company Interests (2013)

 

18,227

 

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Metals

 

 

 

8,801,933

 

7,426,174

 

6.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Network Communications, Inc. (d)

 

Publishing

 

Unsecured Notes
8.60% PIK, 1/14/2020

 

$

2,716,179

 

2,071,371

 

983,099

 

0.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Network Communications, Inc. (d), (g)

 

Publishing

 

Common Stock

 

211,429

 

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Penton Media, Inc. (d)

 

Publishing

 

First Lien Term Loan
6.00% Cash, 8/1/2014

 

$

4,849,233

 

4,561,918

 

4,769,221

 

4.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Publishing

 

 

 

6,633,289

 

5,752,320

 

5.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Community Investors, Inc. (d)

 

Software

 

First Lien Term Loan 9.75% Cash, 5/9/2018

 

$

6,150,000

 

6,028,549

 

6,150,000

 

5.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Community Investors, Inc. (d)

 

Software

 

Revolver

 

$

166,667

 

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Community Investors, Inc. (d), (g)

 

Software

 

Common Stock

 

1,282

 

1,282

 

1,282

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Community Investors, Inc. (d), (g)

 

Software

 

Preferred Stock

 

148,718

 

148,718

 

148,718

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Software

 

 

 

6,178,549

 

6,300,000

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sub Total Non-control/Non-affiliated investments

 

 

 

 

 

 

 

140,710,469

 

141,254,519

 

125.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Control investments - 21.0% (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GSC Investment Corp. CLO 2007 LTD. (d), (e), (f)

 

Structured Finance Securities

 

Other/Structured Finance Securities
26.43%, 1/21/2020

 

$

30,000,000

 

17,657,435

 

23,584,582

 

21.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sub Total Control investments

 

 

 

 

 

 

 

17,657,435

 

23,584,582

 

21.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL INVESTMENTS - 146.5% (b)

 

 

 

 

 

 

 

$

158,367,904

 

$

164,839,101

 

146.5

%

 


(a)

All of our equity and debt investments are issued by eligible portfolio companies, as defined in the Investment Company Act of 1940, except GSC Investment Corp. CLO 2007 Ltd.

(b)

Percentages are based on net assets of $112,486,612 as of May 31, 2013.

(c)

Because there is no readily available market value for these investments, the fair value of these investments is approved in good faith by our board of directors. (see Note 3 to the consolidated financial statements).

(d)

These securities are pledged as collateral under a senior secured revolving credit facility (see Note 6 to the consolidated financial statements).

(e)

26.43% represents the modeled effective interest rate that is expected to be earned over the life of the investment.

(f)

As defined in the Investment Company Act, we “Control” this portfolio company because we own more than 25% of the portfolio company’s outstanding voting securities. Transactions during the period in which the issuer was both an Affiliate and a portfolio company that we Control are as follows:

 

 

 

 

 

 

 

 

 

Interest

 

Management

 

Net Realized

 

Net Unrealized

 

Company

 

Purchases

 

Redemptions

 

Sales (cost)

 

Income

 

fee income

 

gains/(losses)

 

gains/(losses)

 

GSC Investment Corp. CLO 2007 LTD.

 

$

 

$

 

$

 

$

1,126,004

 

$

498,091

 

$

 

$

5,927,147

 

 

(g)

Non-income producing at May 31, 2013.

 

5



Table of Contents

 

Saratoga Investment Corp.

 

Consolidated Schedule of Investments

 

February 28, 2013

 

Company (a)

 

Industry

 

Investment Interest Rate / Maturity

 

Principal/
Number of Shares

 

Cost

 

Fair Value (c)

 

% of
Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-control/Non-affiliated investments - 119.2% (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coast Plating, Inc. (d)

 

Aerospace

 

First Lien Term Loan 11.70% Cash, 9/13/2014

 

$

2,550,000

 

$

2,550,000

 

$

2,550,000

 

2.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coast Plating, Inc. (d)

 

Aerospace

 

First Lien Term Loan 13.20% Cash, 9/13/2014

 

$

950,000

 

950,000

 

950,000

 

0.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Aerospace

 

 

 

3,500,000

 

3,500,000

 

3.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Truck Protection Co., Inc. (d), (h)

 

Automotive

 

Common Stock

 

589

 

500,000

 

591,827

 

0.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Truck Protection Co., Inc. (d)

 

Automotive

 

First Lien Term Loan 15.50% Cash 8/10/2017

 

$

5,500,000

 

5,500,000

 

5,500,000

 

5.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Take 5 Oil Change, L.L.C. (d)

 

Automotive

 

First Lien Term Loan 9.00% Cash, 11/28/2016

 

$

6,000,000

 

6,000,000

 

6,000,000

 

5.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Take 5 Oil Change, L.L.C. (d)

 

Automotive

 

First Lien Term Loan 13.00% Cash, 11/28/2016

 

$

2,000,000

 

1,961,761

 

2,000,000

 

1.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Take 5 Oil Change, L.L.C. (d), (h)

 

Automotive

 

Common Stock

 

7,128

 

712,800

 

712,800

 

0.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Automotive

 

 

 

14,674,561

 

14,804,627

 

13.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy Cabinets Holdings (d), (h)

 

Building Products

 

Common Stock Voting A-1

 

2,535

 

220,900

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy Cabinets Holdings (d), (h)

 

Building Products

 

Common Stock Voting B-1

 

1,600

 

139,424

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy Cabinets, Inc. (d)

 

Building Products

 

First Lien Term Loan 7.25% (1.00% Cash/6.25% PIK), 5/3/2014

 

$

332,229

 

332,229

 

267,378

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Building Products

 

 

 

692,553

 

267,378

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emily Street Enterprises, L.L.C. (d)

 

Business Services

 

Senior Secured Note 14.00% (13.00% Cash/1.00% PIK), 12/28/2017

 

$

5,705,384

 

5,595,317

 

5,705,384

 

5.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emily Street Enterprises, L.L.C. (d), (h)

 

Business Services

 

Warrant Membership Interests

 

49,318

 

400,000

 

399,969

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dispensing Dynamics International (d)

 

Business Services

 

Senior Secured Note 12.50% Cash, 1/1/2018

 

$

7,000,000

 

6,860,186

 

7,000,000

 

6.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Knowland Technology Holdings, L.L.C. (d)

 

Business Services

 

First Lien Term Loan 11.00% Cash, 11/29/2017

 

$

6,200,000

 

6,082,248

 

6,200,000

 

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sourcehov LLC (d)

 

Business Services

 

Second Lien Term Loan 10.50% Cash, 4/29/2018

 

$

3,000,000

 

2,648,298

 

2,850,000

 

2.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Business Services

 

 

 

21,586,049

 

22,155,353

 

20.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C.H.I. Overhead Doors, Inc. (d)

 

Consumer Products

 

First Lien Term Loan 7.25% Cash, 8/17/2017

 

$

4,974,747

 

4,930,481

 

5,024,495

 

4.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Targus Group International, Inc. (d)

 

Consumer Products

 

First Lien Term Loan 11.00% Cash, 5/24/2016

 

$

3,940,003

 

3,888,460

 

3,956,551

 

3.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Targus Holdings, Inc. (d)

 

Consumer Products

 

Unsecured Note 10.00% PIK, 6/14/2019

 

$

1,914,341

 

1,914,341

 

1,116,252

 

1.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Targus Holdings, Inc. (d)

 

Consumer Products

 

Unsecured Note 16.00% Cash, 10/26/2018

 

$

332,500

 

326,320

 

305,334

 

0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Targus Holdings, Inc. (d), (h)

 

Consumer Products

 

Common Stock

 

62,413

 

566,765

 

3,324,741

 

3.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Consumer Products

 

 

 

11,626,367

 

13,727,373

 

12.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CFF Acquisition L.L.C. (d)

 

Consumer Services

 

First Lien Term Loan 7.50% Cash, 7/31/2015

 

$

2,161,391

 

2,032,060

 

2,154,475

 

2.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expedited Travel L.L.C. (d)

 

Consumer Services

 

First Lien Term Loan 12.00% Cash, 12/28/2017

 

$

5,500,000

 

5,380,520

 

5,500,000

 

5.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PrePaid Legal Services, Inc. (d)

 

Consumer Services

 

First Lien Term Loan 11.00% Cash, 12/31/2016

 

$

3,000,000

 

2,936,860

 

3,000,000

 

2.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Consumer Services

 

 

 

10,349,440

 

10,654,475

 

9.8

%

 



Table of Contents

 

Company (a)

 

Industry

 

Investment Interest Rate / Maturity

 

Principal/
Number of Shares

 

Cost

 

Fair Value (c)

 

% of
Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M/C Acquisition Corp., L.L.C. (d)

 

Education

 

First Lien Term Loan 1.00% Cash, 12/31/2012

 

$

2,740,780

 

1,586,846

 

291,893

 

0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M/C Acquisition Corp., L.L.C. (d), (h)

 

Education

 

Class A Common Stock

 

544,761

 

30,242

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Education

 

 

 

1,617,088

 

291,893

 

0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group Dekko, Inc. (d)

 

Electronics

 

Second Lien Term Loan 11.00% (10.00% Cash/1.00% PIK), 5/1/2016

 

$

6,824,717

 

6,824,717

 

6,720,981

 

6.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Electronics

 

 

 

6,824,717

 

6,720,981

 

6.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

USS Parent Holding Corp. (d), (h)

 

Environmental

 

Non Voting Common Stock

 

765

 

133,002

 

125,981

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

USS Parent Holding Corp. (d), (h)

 

Environmental

 

Voting Common Stock

 

17,396

 

3,025,798

 

2,866,065

 

2.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Environmental

 

 

 

3,158,800

 

2,992,046

 

2.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DS Waters of America, Inc. (d)

 

Food and Beverage

 

First Lien Term Loan 10.50% Cash, 8/29/2017

 

$

3,970,000

 

3,994,704

 

4,049,400

 

3.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOA Restaurant Group, L.L.C. (d)

 

Food and Beverage

 

Senior Secured Note 11.25% Cash, 4/1/2017

 

$

4,000,000

 

3,897,940

 

3,560,000

 

3.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TB Corp. (d)

 

Food and Beverage

 

First Lien Term Loan 5.81% Cash, 6/19/2018

 

$

5,153,506

 

5,128,662

 

5,140,622

 

4.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TB Corp. (d)

 

Food and Beverage

 

Unsecured Note 13.50% (12.00% Cash/1.50% PIK), 2/19/2017

 

$

2,504,585

 

2,468,317

 

2,492,062

 

2.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TM Restaurant Group L.L.C. (d)

 

Food and Beverage

 

First Lien Term Loan 7.75% Cash, 7/17/2017

 

$

2,962,500

 

2,943,045

 

2,956,871

 

2.7

%