May 7, 2025

Saratoga Investment Corp. Announces 2025 Fiscal Year and Fourth Quarter Financial Results

Reports 4.7% Sequential Quarter and 6.1% Annual Increase in NAV Reducing Leverage

Net Deployments of $25.9 Million for the Fiscal Fourth Quarter 2025, Supporting One New Platform and Six Follow-Ons – Two Additional New Portfolio Companies Since Year-End

Non-Accruals Reduced to 0.3% of Fair Value and 0.5% of Cost in Fiscal 2025

NEW YORK, May 07, 2025 (GLOBE NEWSWIRE) -- Saratoga Investment Corp. (NYSE: SAR) (“Saratoga Investment” or “the Company”), a business development company (“BDC”), today announced financial results for its 2025 fiscal year and fourth quarter ended February 28, 2025.

Summary Financial Information
The Company’s summarized financial information is as follows:


	For the years ended and as of
($ in thousands, except per share)	February 28, 2025		February 29, 2024		February 28, 2023
Assets Under Management (AUM)	978,078		1,138,794		972,590
Net Asset Value (NAV)	392,666		370,224		346,958
NAV per share	25.86		27.12		29.18
Total Investment Income	148,855		143,720		99,104
Net Investment Income (NII) per share	3.81		4.49		2.94
Adjusted NII per share	3.81		4.10		2.85
Earnings per share	2.02		0.71		2.06
Dividends per share (declared)	3.31*		2.86		2.44
Return on Equity	7.5	%	2.5	%	7.2	%
Originations	168,077		246,101		365,250
Repayments	312,113		30,271		202,390

* Includes special dividend of $0.35 per share declared during the quarter ended November 30, 2024, in conjunction with the regular dividend.


		For the three months ended and as of
($ in thousands, except per share)		February 28, 2025		November 30, 2024		February 29, 2024
Assets Under Management (AUM)		978,078		960,093		1,138,794
Net Asset Value (NAV)		392,666		374,866		370,224
NAV per share		25.86		26.95		27.12
Total Investment Income		31,295		35,879		37,233
Net Investment Income (NII) per share		0.56		0.90		0.94
Adjusted NII per share		0.56		0.90		0.94
Earnings per share		(0.05	)	0.64		0.39
Dividends per share (declared)		0.74		0.74*		0.73
Return on Equity	– last twelve months	7.5	%	9.2	%	2.5	%
	– annualized quarter	(0.7	%)	9.5	%	5.8	%
Originations		41,802		84,490		43,217
Repayments		15,867		160,404		11,023

* Actual dividend of $1.09 per share, including the additional special dividend of $0.35 per share declared this quarter in conjunction with the regular dividend.

Christian L. Oberbeck, Chairman and Chief Executive Officer of Saratoga Investment, commented, “Highlights this quarter include net positive originations generated from our pipeline, including one new portfolio company originated in the quarter and two new companies since the quarter-end, an increase in AUM on a fair value basis, lower statutory and absolute leverage from an increase in NAV, and importantly, the core BDC portfolio demonstrating solid performance in a volatile macro environment.”

“Building on our strong dividend distribution history with a base quarterly dividend of $0.74 per share, declared and distributed for the fiscal fourth quarter, we announced the transition to a monthly dividend structure, increasing our quarterly base dividend by $0.01 per share to $0.25 per share per month, or $0.75 per share in aggregate for the first quarter of fiscal 2026. From an overall investment value and current yield perspective, our annualized first quarter dividend of $0.75 per share implies a 12.1% dividend yield based on the stock price of $24.86 per share on May 6, 2025. Our Q4 adjusted NII of $0.56 per share, further adjusted for a $0.13 per share annual excise tax expense, is $0.69 per share, and reflects the impact of the past nine-months trend of decreasing levels of short-term interest rates and spreads on Saratoga Investment’s largely floating rate assets, and the full period impact of the recent outsized repayments. This has resulted in $204.7 million of cash available to be deployed accretively in investments or to repay existing debt.”

“During the quarter, we continued to see the early stages of a potential increase in M&A in the lower middle market, reflected in multiple equity realizations in Q4, in addition to significant new originations. The three equity realizations generated $7.2 million of realized gains, while we originated $41.8 million in one new portfolio company and six follow-ons. Our strong reputation and differentiated market positioning, combined with our ongoing development of sponsor relationships, continues to create attractive investment opportunities from high quality sponsors. These trends have continued since quarter-end, with $45.5 million of originations, including two new portfolio companies and six follow-ons, and $24.5 million of partial or full repayments of investments. We continue to remain prudent and discerning in terms of new commitments in the current volatile environment”

“Saratoga’s overall performance is reflected in our key performance indicators this past year, including: (i) LTM ROE of 7.5%, (ii) deleveraging from 161.1% regulatory leverage to 162.9%, due in part to the NAV increase of $22.5 million from the previous year ($370.2 million to $392.7 million), (iii) total investment income increase of $5.1 million from the previous year ($143.7 million to $148.9 million), (iv) adjusted NII of $3.81 per share versus $4.10 per share last year, net of $0.37 of dilution from increased share count, (v) EPS of $2.02 per share, up from $0.71 in the previous year, and (vi) dividends of $3.31 per share, up 15.7% from $2.86 per share in fiscal 2024, with this year including a $0.35 per share special dividend paid in December.”

“At the foundation of our strong operating performance is the high-quality nature, resilience and balance of our $978.1 million portfolio in the current environment. Where we have encountered significant challenges in four of our portfolio companies over the past year, we have completed decisive action and resolved all four of these situations through two sales and two restructurings. Our current core non-CLO portfolio was marked down by $3.4 million this quarter, and the CLO and JV were marked down by $2.7 million. We also had three equity realizations, and although these three investments had $1.5 million of unrealized depreciation during the quarter due to late changes in transaction pricing, they generated overall realized gains of $7.2 million, for a total net reduction in portfolio value related to marks of $7.6 million this quarter. Our total portfolio fair value is now 2.2% below cost, while our core non-CLO portfolio is 1.6% above cost. The overall financial performance and solid earnings power of our current portfolio reflects strong underwriting in our growing portfolio companies and sponsors in well-selected industry segments.”

“Our quarter-end cash position reduced from $250.2 million last quarter to $204.7 million as of year-end, a strong level of cash availability in a very volatile macro environment. This level of cash improves our current regulatory leverage of 162.9% to 186.2% net leverage, netting available cash against outstanding debt.”

“Our overall credit quality for this quarter remained steady at 99.7% of credits rated in our highest category, with the two investments remaining on non-accrual status being Zollege and Pepper Palace, both of which have been successfully restructured, representing only 0.3% and 0.5% of fair value and cost, respectively. With 88.7% of our investments at quarter-end in first lien debt and generally supported by strong enterprise values and balance sheets in industries that have historically performed well in stressed situations, we believe our portfolio and company leverage is well structured for future economic conditions and uncertainty.”

Mr. Oberbeck concluded, “Recognizing the challenges posed by the current tariff discussions and the volatility seen in the broader macro environment, we remain confident in our experienced management team, robust pipeline, strong leverage structure, and high underwriting standards to continue to steadily increase our portfolio size, quality and investment performance over the long-term to deliver exceptional risk adjusted returns to shareholders.”

Discussion of Financial Results for the Year and Quarter ended February 28, 2025:

AUM as of February 28, 2025, was $978.1 million, a decrease of 14.1% from $1.139 billion as of February 29, 2024, and an increase of 1.9% from $960.1 million as of last quarter.
Total investment income for the year ended February 28, 2025, was $148.9 million, an increase of $5.2 million, or 3.6%, from $143.7 million in the year ended February 29, 2024. For the three months ended February 28, 2025, total investment income was $31.3 million, a decrease of $5.9 million, or 15.9%, from $37.2 million for the quarter ended February 29, 2024, and a decrease of $4.6 million, or 12.8%, as compared to $35.9 million for the quarter ended November 30, 2024. This quarter’s investment income decrease as compared to prior quarters was due to both this year’s interest base rate decreases as well as lower recent AUM levels, reflecting the full period impact of recent Q3 net repayments. Investment income reflects a weighted average interest rate on the core BDC portfolio of 11.5%, as compared to 11.8% as of November 30, 2024 and 12.6% as of February 29, 2024, with the yield reduction primarily reflecting SOFR base rate decreases over the past year.
Total expenses for the fiscal year 2025, excluding interest and debt financing expenses, base management fees and incentive fees, and income and excise taxes, increased $0.8 million from $8.6 million to $9.3 million as compared to fiscal year 2024. Total expenses for the fiscal fourth quarter 2025, excluding interest and debt financing expenses, base management fees and incentive fees, and income and excise taxes, decreased $0.5 million to $1.4 million as compared to $1.9 million for the fourth quarter of fiscal year 2024, and decreased $1.4 million as compared to $2.8 million for the quarter ended November 30, 2024. This represented 0.8% of average total assets for fiscal 2025, up from 0.7% last year.
Adjusted NII for the year ended February 28, 2025, was $53.0 million, an increase of $1.1 million, or 2.1%, from $51.9 million in the previous year. Adjusted NII for the quarter ended February 28, 2025, was $8.0 million, a decrease of $4.7 million, or 37.2%, from $12.8 million in the quarter ended February 29, 2024, and a decrease of $4.4 million, or 35.4% from $12.4 million in the quarter ended November 30, 2024. This quarter’s decrease in adjusted NII as compared to prior quarters was primarily due to lower total investment income resulting from current lower AUM and base interest rates, as previously noted.
NII Yield as a percentage of average net asset value was 14.1% for the year ended February 28, 2025. Adjusted for the incentive fee accrual related to net capital gains, the NII Yield was also 14.1%. In comparison, adjusted NII Yield was 14.6% for the year ended February 29, 2024. For the quarter ended February 28, 2025, NII Yield as a percentage of average net asset value was 8.4%. Adjusted for the incentive fee accrual related to net capital gains, the NII Yield was also 8.4%. In comparison, adjusted NII Yield was 14.0% for the quarter ended February 29, 2024, and 13.3% for the quarter ended November 30, 2024.
NAV was $392.7 million as of February 28, 2025, an increase of $22.5 million from $370.2 million as of February 29, 2024, and an increase of $17.8 million from $374.9 million as of November 30, 2024.
NAV per share was $25.86 as of February 28, 2025, compared to $27.12 as of February 29, 2024, and $26.95 as of November 30, 2024.
Return on equity (“ROE”) for the last twelve months ended February 28, 2025, was 7.5%, up from 2.5% for the comparable period last year, and down from 9.2% for the twelve months ended November 30, 2024. ROE on an annualized basis for the quarter ended February 28, 2025 was (0.7)%.
The weighted average common shares outstanding for the quarter ended February 28, 2025 was 14.5 million, increasing from 13.8 million and 13.6 million for the quarters ended November 30, 2024 and February 29, 2024, respectively.

Portfolio and Investment Activity for the Year and Quarter Ended February 28, 2025

Fair value of Saratoga Investment’s portfolio was $978.1 million, excluding $204.7 million in cash and cash equivalents, principally invested in 48 portfolio companies, one collateralized loan obligation fund (the “CLO”) and one joint venture fund (the “JV”).
Cost of investments made during the year ended February 28, 2025, were $168.1 million, including 35 follow-ons and three investments in new portfolio companies. The cost of investments made during the fiscal fourth quarter were $41.8 million, including six follow-ons and one investment in a new portfolio company.
Principal repayments during the year ended February 28, 2025, were $312.1 million, including four equity realizations, two restructurings and nine full repayments of existing investments, plus amortization. Principal repayments during the fiscal fourth quarter were $15.9 million, including three equity realizations, plus debt amortization.
- For the quarter ended February 28, 2025, the fair value of the portfolio decreased by $7.6 million of net realized gains and unrealized depreciation, consisting of (1) $3.4 million net unrealized depreciation in our core non-CLO portfolio, including Pepper Palace and Zollege, (ii) net unrealized depreciation in the CLO and JV of $2.7 million, and (iii) $8.7 million unrealized depreciation related to the reversal of previously recognized unrealized appreciation on realizations reclassified to realized gains, offset by net realized gains of $7.2 million on the equity realizations of the Nauticon, Vector and Modern Campus investments.
- Since taking over management of the BDC in 2010, the Company has generated $1.2 billion of repayments and sales of investments originated by Saratoga Investment, generating a gross unlevered IRR of 15.1%. Total investments originated by Saratoga are $2.28 billion in 120 portfolio companies.
The overall portfolio composition consisted of 88.7% of first lien term loans, 0.7% of second lien term loans, 1.7% of unsecured term loans, 1.5% of structured finance securities, and 7.4% of common equity.
The weighted average current yield on Saratoga Investment’s portfolio based on current fair values was 10.8%, which was comprised of a weighted average current yield of 11.3% on first lien term loans, 16.7% on second lien term loans, 10.7% on unsecured term loans, 19.9% on structured finance securities and 0.0% on equity interests.

Portfolio Update:

Subsequent to quarter-end, Saratoga Investment has executed approximately $45.5 million of new originations in two new portfolio companies and six follow-ons, including delayed draws, and had one full repayment, five partial repayments and one equity realization of $24.5 million, for a net increase in investments of $21.0 million.

Liquidity and Capital Resources

Outstanding Borrowings:

As of February 28, 2025, Saratoga Investment had a combined $52.5 million in outstanding combined borrowings under its $65.0 million senior secured revolving credit facility with Encina and its $75.0 million senior secured revolving credit facility with Live Oak.
At the same time, Saratoga Investment had $131.0 million of SBA debentures in its SBIC II license outstanding, $39.0 million of SBA debentures in its SBIC III license outstanding, $269.4 million of listed baby bonds issued, $250.0 million of unsecured unlisted institutional bond issuances, five unlisted issuances of $52.0 million in total, and an aggregate of $204.7 million in cash and cash equivalents.

Undrawn Borrowing Capacity:

With $87.5 million available under the two credit facilities and $204.7 million of cash and cash equivalents as of February 28, 2025, Saratoga Investment has a total of $292.2 million of undrawn credit facility borrowing capacity and cash and cash equivalents to be used for new investments or to support existing portfolio companies in the BDC and the SBIC.
In addition, Saratoga Investment has $136.0 million in undrawn SBA debentures available from its existing SBIC III license.
Availability under the Encina and Live Oak credit facilities can change depending on portfolio company performance and valuation. In addition, certain follow-on investments in SBIC II and the BDC will not qualify for SBIC III funding. Overall outstanding SBIC debentures are limited to $350.0 million across all active SBIC licenses.
Total Saratoga Investment undrawn borrowing capacity is therefore $428.2 million.
As of fiscal 2025 fourth quarter-end, Saratoga Investment had $50.9 million of committed undrawn lending commitments and $75.7 million of discretionary funding commitments.

Additionally:

Saratoga Investment has an active equity distribution agreement with Ladenburg Thalmann & Co. Inc., Raymond James and Associates, Inc, Lucid Capital Markets, LLC and Compass Point Research and Trading, LLC, through which the Company may offer for sale, from time to time, up to $300.0 million of common stock through an ATM offering.
- As of February 28, 2025, Saratoga Investment has sold 7,844,716 shares for gross proceeds of $207.9 million at an average price of $26.37 for aggregate net proceeds of $206.1 million (net of transaction costs).
- During the three months ended February 28, 2025, Saratoga Investment sold a total of 1,192,400 shares for gross proceeds of $32.4 million at an average price of $26.99 for aggregate net proceeds of $32.2 million (net of transaction costs).
- During the year ended February 28, 2025, Saratoga Investments sold a total of 1,300,838 shares for gross proceeds of $35.4 million at an average price of $26.99 for aggregate net proceeds of $35.1 million (net of transaction costs).

Dividend

On February 18, 2025, Saratoga Investment announced that its Board of Directors declared a base quarterly dividend of $0.74 per share for the fiscal quarter ended February 28, 2025. The dividend was paid on March 25, 2025, to all stockholders of record at the close of business on March 6, 2025.

In addition, its Board of Directors also transitioned Saratoga Investment’s dividend payment schedule from quarterly to monthly beginning with the month ended March 31, 2025. As part of that transition, it increased its quarterly dividend by $0.01 per share to $0.75 per share in aggregate for the first quarter of fiscal 2026, declaring the following three monthly $0.25 per share dividends for the quarter ended May 31, 2025:


Month	Amount Per Share	Record Date	Payment Date
March 2025	$0.25	April 8, 2025	April 24, 2025
April 2025	$0.25	May 6, 2025	May 22, 2025
May 2025	$0.25	June 5, 2025	June 24, 2025

Shareholders have the option to receive payment of dividends in cash or receive shares of common stock, pursuant to the Company’s DRIP. Shares issued under the Company’s DRIP is issued at a 5% discount to the average market price per share at the close of trading on the ten trading days immediately preceding (and including) the payment date.

The following table highlights Saratoga Investment’s dividend history over the past twelve quarters:


Period (Fiscal Year ends Feb)	Base Dividend Per Share	Special Dividend Per Share	Total Dividend Per Share
Fiscal Q4 2025	$0.74	-	$0.74
Fiscal Q3 2025	$0.74	$0.35	$1.09
Fiscal Q2 2025	$0.74	-	$0.74
Fiscal Q1 2025	$0.74	-	$0.74
*Full Year Fiscal 2025*	$*2.96*	$*0.35*	$*3.31*
Fiscal Q4 2024	$0.73	-	$0.73
Fiscal Q3 2024	$0.72	-	$0.72
Fiscal Q2 2024	$0.71	-	$0.71
Fiscal Q1 2024	$0.70	-	$0.70
*Full Year Fiscal 2024*	$*2.86*	-	$*2.86*
Fiscal Q4 2023	$0.69	-	$0.69
Fiscal Q3 2023	$0.68	-	$0.68
Fiscal Q2 2023	$0.54	-	$0.54
Fiscal Q1 2023	$0.53	-	$0.53
*Full Year Fiscal 2023*	$*2.44*	-	$*2.44*

Share Repurchase Plan

As of February 28, 2025, the Company purchased 1,035,203 shares of common stock, at the average price of $22.05 for approximately $22.8 million pursuant to its existing Share Repurchase Plan. During the three and twelve months ended February 28, 2025, the Company did not purchase any shares of common stock pursuant to its Share Repurchase Plan.

Previously, in fiscal year 2015, the Company announced the approval of an open market share repurchase plan (the “Share Repurchase Plan”) that allows it to repurchase up to 200,000 shares of its common stock at prices below its NAV as reported in its then most recently published financial statements. Since then, the Share Repurchase Plan has been extended annually, and the Company has periodically increased the amount of shares of common stock that may be purchased under the Share Repurchase Plan, most recently to 1.7 million shares of common stock. On January 7, 2025, its Board of Directors extended the Share Repurchase Plan for another year to January 15, 2026.

2025 Fiscal Year and Fourth Quarter Conference Call/Webcast Information


When:	Thursday, May 8, 2025
	1:00 p.m. Eastern Time (ET)

How:	Webcast: Interested parties may access a live webcast of the call and find the Full Year and Fourth Quarter 2025 presentation by going to the “Events & Presentations” section of Saratoga Investment Corp.’s investor relations website (Saratoga events and presentations). A replay of the webcast will also be available for a limited time at Saratoga events and presentations.

Call:	To access the call by phone, please go to this link (registration link) and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time

About Saratoga Investment Corp.

Saratoga Investment is a specialty finance company that provides customized financing solutions to U.S. middle-market businesses. The Company invests primarily in senior and unitranche leveraged loans and mezzanine debt, and, to a lesser extent, equity to provide financing for change of ownership transactions, strategic acquisitions, recapitalizations and growth initiatives in partnership with business owners, management teams and financial sponsors. Saratoga Investment’s objective is to create attractive risk-adjusted returns by generating current income and long-term capital appreciation from its debt and equity investments. Saratoga Investment has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, and is externally managed by Saratoga Investment Advisors, LLC, an SEC-registered investment advisor focusing on credit-driven strategies. Saratoga Investment Corp. owns two active SBIC-licensed subsidiaries, having surrendered its first license after repaying all debentures for that fund following the end of its investment period and subsequent wind-down. Furthermore, it manages a $650 million collateralized loan obligation (“CLO”) fund that is in wind-down and co-manages a joint venture (“JV”) fund that owns a $400 million collateralized loan obligation (“JV CLO”) fund. It also owns 52% of the Class F and 100% of the subordinated notes of the CLO, 87.5% of both the unsecured loans and membership interests of the JV and 87.5% of the Class E notes of the JV CLO. The Company’s diverse funding sources, combined with a permanent capital base, enable Saratoga Investment to provide a broad range of financing solutions.

Forward Looking Statements

This press release contains historical information and forward-looking statements with respect to the business and investments of the Company, including, but not limited to, the statements about future events or our future performance or financial condition. Forward-looking statements can be identified by the use of forward looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or negative versions of those words, other comparable words or other statements that do not relate to historical or factual matters. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including, but not limited to: changes in the markets in which we invest; changes in the financial, capital, and lending markets; an economic downturn or a recession and its impact on the ability of our portfolio companies to operate and the investment opportunities available to us; the impact of interest rate volatility on our business and our portfolio companies; the uncertainty associated with the imposition of tariffs and trade barriers and changes in trade policy and its impact on our portfolio companies and the global economy; the impact of supply chain constraints and labor shortages on our portfolio companies; and the elevated levels of inflation and its impact on our portfolio companies and the industries in which we invests, as well as those described from time to time in our filings with the Securities and Exchange Commission.

Any forward-looking statement speaks only as of the date on which it is made. The Company undertakes no duty to update any forward-looking statements made herein or on the webcast/conference call, whether as a result of new information, future developments or otherwise, except as required by law. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2025 and subsequent filings, including the “Risk Factors” sections therein, with the Securities and Exchange Commission for a more complete discussion of the risks and other factors that could affect any forward-looking statements.

Contacts:
Saratoga Investment Corporation
535 Madison Avenue, 4th Floor
New York, NY 10022

Henri Steenkamp
Chief Financial Officer
Saratoga Investment Corp.
212-906-7800

Lena Cati
The Equity Group Inc.
212-836-9611

Val Ferraro
The Equity Group Inc.
212-836-9633

Financials


Saratoga Investment Corp.
Consolidated Statements of Assets and Liabilities

	February 28, 2025			February 29, 2024

ASSETS
Investments at fair value
Non-control/Non-affiliate investments (amortized cost of $886,071,934 and $1,035,879,751, respectively)	$	897,660,110		$	1,019,774,616
Affiliate investments (amortized cost of $38,203,811 and $26,707,415, respectively)		40,547,432			27,749,137
Control investments (amortized cost of $75,817,587 and $117,196,571, respectively)		39,870,208			91,270,036
Total investments at fair value (amortized cost of $1,000,093,332 and $1,179,783,737, respectively)		978,077,750			1,138,793,789
Cash and cash equivalents		148,218,491			8,692,846
Cash and cash equivalents, reserve accounts		56,505,433			31,814,278
Interest receivable (net of reserve of $210,319 and $9,490,340, respectively)		7,477,468			10,298,998
Management fee receivable		314,193			343,023
Other assets		950,522			1,163,225
Current income tax receivable		-			99,676
Total assets	$	1,191,543,857		$	1,191,205,835

LIABILITIES
Revolving credit facilities	$	52,500,000		$	35,000,000
Deferred debt financing costs, revolving credit facilities		(1,254,516	)		(882,122	)
SBA debentures payable		170,000,000			214,000,000
Deferred debt financing costs, SBA debentures payable		(4,041,026	)		(5,779,892	)
8.75% Notes Payable 2025		20,000,000			20,000,000
Discount on 8.75% notes payable 2025		(9,055	)		(112,894	)
Deferred debt financing costs, 8.75% notes payable 2025		(374	)		(4,777	)
7.00% Notes Payable 2025		12,000,000			12,000,000
Discount on 7.00% notes payable 2025		(68,589	)		(193,175	)
Deferred debt financing costs, 7.00% notes payable 2025		(8,345	)		(24,210	)
7.75% Notes Payable 2025		5,000,000			5,000,000
Deferred debt financing costs, 7.75% notes payable 2025		(19,685	)		(74,531	)
4.375% Notes Payable 2026		175,000,000			175,000,000
Premium on 4.375% notes payable 2026		287,848			564,260
Deferred debt financing costs, 4.375% notes payable 2026		(865,593	)		(1,708,104	)
4.35% Notes Payable 2027		75,000,000			75,000,000
Discount on 4.35% notes payable 2027		(213,424	)		(313,010	)
Deferred debt financing costs, 4.35% notes payable 2027		(688,786	)		(1,033,178	)
6.25% Notes Payable 2027		15,000,000			15,000,000
Deferred debt financing costs, 6.25% notes payable 2027		(202,144	)		(273,449	)
6.00% Notes Payable 2027		105,500,000			105,500,000
Discount on 6.00% notes payable 2027		(87,295	)		(123,782	)
Deferred debt financing costs, 6.00% notes payable 2027		(1,524,089	)		(2,224,403	)
8.00% Notes Payable 2027		46,000,000			46,000,000
Deferred debt financing costs, 8.00% notes payable 2027		(927,484	)		(1,274,455	)
8.125% Notes Payable 2027		60,375,000			60,375,000
Deferred debt financing costs, 8.125% notes payable 2027		(1,156,234	)		(1,563,594	)
8.50% Notes Payable 2028		57,500,000			57,500,000
Deferred debt financing costs, 8.50% notes payable 2028		(1,273,134	)		(1,680,039	)
Base management and incentive fees payable		6,230,944			8,147,217
Deferred tax liability		4,889,329			3,791,150
Accounts payable and accrued expenses		1,676,335			1,337,542
Interest and debt fees payable		3,909,517			3,582,173
Due to Manager		349,189			450,000
Total liabilities		798,878,389			820,981,727

Commitments and contingencies

NET ASSETS
Common stock, par value $0.001, 100,000,000 common sharesauthorized, 15,183,078 and 13,653,476 common shares issued and outstanding, respectively		15,183			13,654
Capital in excess of par value		412,913,597			371,081,199
Total distributable deficit		(20,263,312	)		(870,745	)
Total net assets		392,665,468			370,224,108
Total liabilities and net assets	$	1,191,543,857		$	1,191,205,835
NET ASSET VALUE PER SHARE	$	25.86		$	27.12

Asset Coverage Ratio		162.9	%		161.1	%


Saratoga Investment Corp.
Consolidated Statements of Operations

	For the year ended
	February 28, 2025			February 29, 2024			February 28, 2023
INVESTMENT INCOME
Interest from investments
Interest income:
Non-control/Non-affiliate investments	$	119,478,418		$	113,521,652		$	72,677,237
Affiliate investments		1,883,615			3,299,816			4,773,527
Control investments		5,649,993			8,507,909			6,602,594
Payment-in-kind interest income:
Non-control/Non-affiliate investments		2,245,934			766,697			359,910
Affiliate investments		1,479,391			874,226			416,711
Control investments		284,590			814,925			386,889
Total interest from investments		131,021,941			127,785,225			85,216,868
Interest from cash and cash equivalents		6,530,315			2,512,416			1,368,489
Management fee income		3,114,466			3,270,232			3,269,820
Dividend income(*):
Non-control/Non-affiliate investments		588,247			621,398			2,104,355
Affiliate investments		-			-			615,917
Control investments		3,973,584			5,911,564			-
Total dividend from investments		4,561,831			6,532,962			2,720,272
Structuring and advisory fee income		1,582,822			2,149,751			3,585,061
Other income		2,043,863			1,469,320			2,943,610
Total investment income		148,855,238			143,719,906			99,104,120

OPERATING EXPENSES
Interest and debt financing expenses		52,059,045			49,179,899			33,498,489
Base management fees		18,382,404			19,212,337			16,423,960
Incentive management fees expense (benefit)		13,254,402			8,025,468			5,057,117
Professional fees		2,058,003			1,767,015			1,812,259
Administrator expenses		4,708,333			3,872,917			3,160,417
Insurance		303,859			322,323			347,483
Directors fees and expenses		366,500			351,297			360,000
General and administrative		1,901,592			2,241,579			2,328,672
Income tax expense (benefit)		412,032			42,926			(152,956	)
Excise tax expense (benefit)		2,406,465			1,829,837			1,067,532
Total operating expenses		95,852,635			86,845,598			63,902,973
NET INVESTMENT INCOME		53,002,603			56,874,308			35,201,147

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) from investments:
Non-control/Non-affiliate investments		12,534,746			153,583			7,446,596
Control investments		(54,564,070	)		-			-
Net realized gain (loss) from investments		(42,029,324	)		153,583			7,446,596
Income tax (provision) benefit from realized gain on investments		-			-			548,568
Net change in unrealized appreciation (depreciation) on investments:
Non-control/Non-affiliate investments		27,693,311			(24,167,727	)		(5,330,880	)
Affiliate investments		1,301,899			(1,541,829	)		574,354
Control investments		(10,020,844	)		(21,381,288	)		(10,461,606	)
Net change in unrealized appreciation (depreciation) on investments		18,974,366			(47,090,844	)		(15,218,132	)
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments		(1,060,936	)		(893,166	)		(1,715,333	)
Net realized and unrealized gain (loss) on investments		(24,115,894	)		(47,830,427	)		(8,938,301	)
Realized losses on extinguishment of debt		(800,452	)		(110,056	)		(1,587,083	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	28,086,257		$	8,933,825		$	24,675,763

WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE	$	2.02		$	0.71		$	2.06
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED		13,912,170			12,670,939			11,963,533

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


Saratoga Investment Corp.
Consolidated Statements of Operations

	For the three months ended
	February 28, 2025			February 29, 2024
INVESTMENT INCOME
Interest from investments
Interest income:
Non-control/Non-affiliate investments	$	24,231,305		$	29,979,395
Affiliate investments		436,995			500,081
Control investments		1,184,856			2,193,359
Payment-in-kind interest income:
Non-control/Non-affiliate investments		172,899			60,358
Affiliate investments		563,584			229,742
Control investments		-			272,344
Total interest from investments		26,589,639			33,235,279
Interest from cash and cash equivalents		2,606,935			647,460
Management fee income		742,289			816,265
Dividend income(*):
Non-control/Non-affiliate investments		3,420			(4,679,699	)
Control investments		812,842			5,911,564
Total dividend from investments		816,262			1,231,865
Structuring and advisory fee income		396,274			363,394
Other income		143,679			939,110
Total investment income		31,295,078			37,233,373

OPERATING EXPENSES
Interest and debt financing expenses		12,924,023			12,551,258
Base management fees		4,221,379			4,950,190
Incentive management fees expense (benefit)		2,009,564			3,197,026
Professional fees		262,431			359,740
Administrator expenses		1,250,000			1,075,000
Insurance		71,923			77,519
Directors fees and expenses		90,000			70,500
General and administrative		(289,021	)		283,673
Income tax expense (benefit)		313,769			54,119
Excise tax expense (benefit)		2,406,465			1,829,837
Total operating expenses		23,260,533			24,448,862
NET INVESTMENT INCOME BEFORE INCOME TAXES		8,034,545			12,784,511
NET INVESTMENT INCOME		8,034,545			12,784,511

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) from investments:
Non-control/Non-affiliate investments		7,169,655			2,327
Net realized gain (loss) from investments		7,169,655			2,327
Net change in unrealized appreciation (depreciation) on investments:
Non-control/Non-affiliate investments		(11,961,415	)		(8,833,640	)
Affiliate investments		167,406			(251,934	)
Control investments		(2,972,628	)		1,920,961
Net change in unrealized appreciation (depreciation) on investments		(14,766,637	)		(7,164,613	)
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments		(313,873	)		(315,473	)
Net realized and unrealized gain (loss) on investments		(7,910,855	)		(7,477,759	)
Realized losses on extinguishment of debt		(800,452	)		-
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(676,762	)	$	5,306,752

WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE	$	(0.05	)	$	0.39
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED		14,455,529			13,621,138

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

Supplemental Information Regarding Adjusted Net Investment Income, Adjusted Net Investment Income Yield and Adjusted Net Investment Income per Share

On a supplemental basis, Saratoga Investment provides information relating to adjusted net investment income, adjusted net investment income yield and adjusted net investment income per share, which are non-GAAP measures. These measures are provided in addition to, but not as a substitute for, net investment income, net investment income yield and net investment income per share, respectively. These non-GAAP measures should only be used to evaluate the Company’s results of operations in conjunction with their corresponding GAAP measures. Adjusted net investment income represents net investment income excluding any capital gains incentive fee expense or reversal attributable to realized and unrealized gains. The management agreement with the Company’s advisor provides that a capital gains incentive fee is determined and paid annually with respect to cumulative realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized losses for such year. In addition, Saratoga Investment accrues, but does not pay, a capital gains incentive fee in connection with any unrealized capital appreciation, as appropriate. All capital gains incentive fees are presented within net investment income within the Consolidated Statements of Operations, but the associated realized and unrealized gains and losses that these incentive fees relate to, are excluded. As such, Saratoga Investment believes that adjusted net investment income, adjusted net investment income yield and adjusted net investment income per share is a useful indicator of operations exclusive of any capital gains incentive fee expense or reversal attributable to gains. In addition, adjusted net investment income in fiscal 2023 also excludes the interest expense and amortization of deferred financing costs related to the 2025 SAK Notes during the period while the 2027 SAT Notes were already issued and outstanding. This expense is directly attributable to the issuance of the 2027 SAT Notes and the subsequent repayment of the 2025 SAK Notes, and is deemed to be non-recurring in nature and not representative of the operations of Saratoga Investment. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Pursuant to the requirements of Item 10(e) of Regulation S-K, the following table provides a reconciliation of net investment income to adjusted net investment income, net investment income yield to adjusted net investment income yield and net investment income per share to adjusted net investment income per share for the years ended February 28, 2025, February 29, 2024 and February 28, 2023, and the quarters ended February 28, 2025 and February 29, 2024.


	For the Years Ended
	February 28, 2025			February 29, 2024			February 28, 2023

Net Investment Income	$	53,002,758		$	56,874,308		$	35,201,147
Changes in accrued capital gains incentive fee expense/ (reversal)		-			(4,957,306	)		(1,782,095	)
Interest expense on 2025 SAK Notes during the period		-			-			655,305
Adjusted net investment income	$	53,002,758		$	51,917,002		$	34,074,357

Net investment income yield		14.1	%		16.0	%		10.2	%
Changes in accrued capital gains incentive fee expense/ (reversal)		-			(1.4	)%		(0.5	)%
Interest expense on 2025 SAK Notes during the period		-			-			0.2	%
Adjusted net investment income yield ⁽¹⁾		14.1	%		14.6	%		9.9	%

Net investment income per share	$	3.81		$	4.49		$	2.94
Changes in accrued capital gains incentive fee expense/ (reversal)		-			(0.39	)		(0.15	)
Interest expense on 2025 SAK Notes during the period		-			-			0.06
Adjusted net investment income per share⁽²⁾	$	3.81		$	4.10		$	2.85

⁽¹⁾	^{Adjusted net investment income yield is calculated as adjusted net investment income divided by average net asset value.}
⁽²⁾	^{Adjusted net investment income per share is calculated as adjusted net investment income divided by weighted average common shares outstanding.}

	For the Three Months Ended
	February 28, 2025			February 29, 2024

Net Investment Income	$	8,034,700		$	12,784,511
Changes in accrued capital gains incentive fee expense/ (reversal)		-			-
Adjusted net investment income	$	8,034,700		$	12,784,511

Net investment income yield		8.4	%		14.0	%
Changes in accrued capital gains incentive fee expense/ (reversal)		-			-
Adjusted net investment income yield ⁽¹⁾		8.4	%		14.0	%

Net investment income per share	$	0.56		$	0.94
Changes in accrued capital gains incentive fee expense/ (reversal)		-			-
Adjusted net investment income per share⁽²⁾	$	0.56		$	0.94

⁽³⁾	^{Adjusted net investment income yield is calculated as adjusted net investment income divided by average net asset value.}
⁽⁴⁾	^{Adjusted net investment income per share is calculated as adjusted net investment income divided by weighted average common shares outstanding.}

Source: Saratoga Investment Corp