UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

Form 10-Q

 

 

 

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

 

For the Quarterly Period Ended May 31, 2021

 

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
6.25% Notes due 2025   SAF   The New York Stock Exchange
7.25% Notes due 2025   SAK   The New York Stock Exchange

 

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

 

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

 

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

 

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

 

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

 

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

 

The number of outstanding common shares of the registrant as of July 7, 2021 was 11,183,471.

 

 

 

 

 

 

TABLE OF CONTENTS

 

      Page
PART I. FINANCIAL INFORMATION  
       
Item 1. Consolidated Financial Statements   1
       
  Consolidated Statements of Assets and Liabilities as of May 31, 2021 (unaudited) and February 28, 2021   1
       
  Consolidated Statements of Operations for the three months ended May 31, 2021 (unaudited) and May 31, 2020 (unaudited)   2
       
  Consolidated Statements of Changes in Net Assets for three months ended May 31, 2021 (unaudited) and May 31, 2020 (unaudited)   3
       
 

Consolidated Statements of Cash Flows for the three months ended May 31, 2021 (unaudited) and May 31, 2020 (unaudited)

  4
       
  Consolidated Schedules of Investments as of May 31, 2021 (unaudited) and February 28, 2021   5
       
  Notes to Consolidated Financial Statements as of May 31, 2021 (unaudited)   17
       
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   75
       
Item 3. Quantitative and Qualitative Disclosures About Market Risk   110
       
Item 4. Controls and Procedures   111
       
PART II. OTHER INFORMATION    
       
Item 1. Legal Proceedings   112
       
Item 1A. Risk Factors   112
       
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   112
       
Item 3. Defaults Upon Senior Securities   112
       
Item 4. Mine Safety Disclosures   112
       
Item 5. Other Information   112
       
Item 6. Exhibits   113
     
Signatures   116

 

i

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

Saratoga Investment Corp.

Consolidated Statements of Assets and Liabilities

 

   May 31, 2021   February 28, 2021 
   (unaudited)     
ASSETS        
Investments at fair value        
Non-control/Non-affiliate investments (amortized cost of $546,808,095 and $471,328,212, respectively)  $550,875,264   $469,946,494 
Affiliate investments (amortized cost of $34,774,328 and $17,331,707, respectively)   39,872,709    19,367,740 
Control investments (amortized cost of $75,078,830 and $61,353,761, respectively)   87,024,892    64,998,481 
Total investments at fair value (amortized cost of $656,661,253 and $550,013,680, respectively)   677,772,865    554,312,715 
Cash and cash equivalents   317,932    18,828,047 
Cash and cash equivalents, reserve accounts   19,659,681    11,087,027 
Interest receivable (net of reserve of $588,904 and $1,152,086, respectively)   6,622,330    4,223,630 
Due from affiliate (See Note 6)   2,600,000    2,719,000 
Management fee receivable   852,876    34,644 
Other assets   848,278    947,315 
Total assets  $708,673,962   $592,152,378 
           
LIABILITIES          
Revolving credit facility  $39,000,000   $- 
Deferred debt financing costs, revolving credit facility   (715,161)   (639,983)
SBA debentures payable   168,000,000    158,000,000 
Deferred debt financing costs, SBA debentures payable   (3,397,674)   (2,642,622)
6.25% Notes Payable 2025   60,000,000    60,000,000 
Deferred debt financing costs, 6.25% notes payable 2025   (1,581,383)   (1,675,064)
7.25% Notes Payable 2025   43,125,000    43,125,000 
Deferred debt financing costs, 7.25% notes payable 2025   (1,319,867)   (1,401,307)
7.75% Notes Payable 2025   5,000,000    5,000,000 
Deferred debt financing costs, 7.75% notes payable 2025   (225,397)   (239,222)
4.375% Notes Payable 2026   50,000,000    - 
Deferred debt financing costs,   (1,205,274)   - 
6.25% Notes Payable 2027   15,000,000    15,000,000 
Deferred debt financing costs, 6.25% notes payable 2027   (469,585)   (476,820)
Base management and incentive fees payable   10,727,948    6,556,674 
Deferred tax liability   2,180,727    1,922,664 
Accounts payable and accrued expenses   1,986,517    1,750,267 
Interest and debt fees payable   1,763,342    2,645,784 
Directors fees payable   92,000    70,500 
Due to manager   368,013    279,065 
Excise tax payable   -    691,672 
Total liabilities   388,329,206    287,966,608 
           
Commitments and contingencies (See Note 8)          
           
NET ASSETS          
Common stock, par value $0.001, 100,000,000 common shares authorized, 11,159,995 and 11,161,416 common shares issued and outstanding, respectively   11,160    11,161 
Capital in excess of par value   304,784,840    304,874,957 
Total distributable earnings (deficit)   15,548,756    (700,348)
Total net assets   320,344,756    304,185,770 
Total liabilities and net assets  $708,673,962   $592,152,378 
NET ASSET VALUE PER SHARE  $28.70   $27.25 

 

See accompanying notes to consolidated financial statements.

 

1

 

 

Saratoga Investment Corp.

Consolidated Statements of Operations

(unaudited)

 

   For the three months ended 
   May 31, 2021   May 31, 2020 
INVESTMENT INCOME        
Interest from investments        
Interest income:        
Non-control/Non-affiliate investments  $11,236,737   $9,955,562 
Affiliate investments   340,512    398,370 
Control investments   1,854,985    1,133,584 
Payment-in-kind interest income:          
Non-control/Non-affiliate investments   176,766    581,946 
Affiliate investments   -    46,223 
Control investments   77,675    34,782 
Total interest from investments   13,686,675    12,150,467 
Interest from cash and cash equivalents   522    11,796 
Management fee income   818,232    634,572 
Structuring and advisory fee income   1,301,875    313,306 
Other income   1,008,686    187,000 
Total investment income   16,815,990    13,297,141 
           
OPERATING EXPENSES          
Interest and debt financing expenses   4,340,912    2,563,876 
Base management fees   2,758,908    2,160,528 
Incentive management fees expense (benefit)   5,262,536    (1,858,310)
Professional fees   507,061    386,888 
Administrator expenses   693,750    556,250 
Insurance   86,318    67,726 
Directors fees and expenses   92,000    60,000 
General & administrative   490,651    350,814 
Income tax expense (benefit)   27,919    (8,945)
Total operating expenses   14,260,055    4,278,827 
NET INVESTMENT INCOME   2,555,935    9,018,314 
           
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS          
Net realized gain (loss) from investments:          
Non-control/Non-affiliate investments   1,910,141    8,480 
Net realized gain (loss) from investments   1,910,141    8,480 
Net change in unrealized appreciation (depreciation) on investments:          
Non-control/Non-affiliate investments   5,448,887    (24,422,894)
Affiliate investments   3,062,348    (2,444,252)
Control investments   8,301,342    (5,083,223)
Net change in unrealized appreciation (depreciation) on investments   16,812,577    (31,950,369)
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   (230,144)   267,740 
Net realized and unrealized gain (loss) on investments   18,492,574    (31,674,149)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $21,048,509   $(22,655,835)
           
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE  $1.88   $(2.02)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED   11,170,045    11,217,545 

 

See accompanying notes to consolidated financial statements.

 

2

 

 

Saratoga Investment Corp.

Consolidated Statements of Changes in Net Assets

(unaudited)

 

   For the three months ended 
   May 31, 2021   May 31, 2020 
INCREASE (DECREASE) FROM OPERATIONS:        
Net investment income  $2,555,935   $9,018,314 
Net realized gain from investments   1,910,141    8,480 
Net change in unrealized appreciation (depreciation) on investments   16,812,577    (31,950,369)
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   (230,144)   267,740 
Net increase (decrease) in net assets resulting from operations   21,048,509    (22,655,835)
           
DECREASE FROM SHAREHOLDER DISTRIBUTIONS:          
Total distributions to shareholders   (4,799,405)   - 
Net decrease in net assets from shareholder distributions   (4,799,405)   - 
           
CAPITAL SHARE TRANSACTIONS:          
Stock dividend distribution   914,102    - 
Repurchases of common stock   (1,003,420)   - 
Repurchase fees   (800)   - 
Net increase in net assets from capital share transactions   (90,118)   - 
Total increase (decrease) in net assets   16,158,986    (22,655,835)
Net assets at beginning of period   304,185,770    304,286,853 
Net assets at end of period  $320,344,756   $281,631,018 

 

See accompanying notes to consolidated financial statements.

 

3

 

 

Saratoga Investment Corp.

Consolidated Statements of Cash Flows

(unaudited)

 

   For the three months ended 
   May 31, 2021   May 31, 2020 
Operating activities        
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $21,048,509   $(22,655,835)
ADJUSTMENTS TO RECONCILE NET INCREASE (DECREASE) IN NET ASSETS RESULTING          
FROM OPERATIONS TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:          
Payment-in-kind and other adjustments to cost   (191,699)   703,636 
Net accretion of discount on investments   (321,106)   (312,430)
Amortization of deferred debt financing costs   470,314    272,683 
Income tax expense (benefit)   27,919    (8,945)
Net realized (gain) loss from investments   (1,910,141)   (8,480)
Net change in unrealized (appreciation) depreciation on investments   (16,812,577)   31,950,369 
Net change in provision for deferred taxes on unrealized appreciation (depreciation) on investments   230,144    (267,740)
Proceeds from sales and repayments of investments   14,941,409    9,350,378 
Purchases of investments   (119,166,038)   (38,998,731)
(Increase) decrease in operating assets:          
Interest receivable   (2,398,700)   501,475 
Due from affiliate   119,000    - 
Management and incentive fee receivable   (818,232)   (13,381)
Other assets   78,581    40,232 
Increase (decrease) in operating liabilities:          
Base management and incentive fees payable   4,171,274    (12,247,640)
Accounts payable and accrued expenses   236,250    (132,244)
Interest and debt fees payable   (882,442)   (1,239,086)
Directors fees payable   21,500    1,500 
Excise tax payable   (691,672)   - 
Due to manager   88,948    (104,112)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES   (101,758,759)   (33,168,351)
           
Financing activities          
Borrowings on debt   49,000,000    20,000,000 
Paydowns on debt   -    (487,000)
Issuance of notes   50,000,000    - 
Repayments of notes   -    - 
Payments of deferred debt financing costs   (2,289,179)   - 
Proceeds from issuance of common stock   -    - 
Payments of cash dividends   (3,885,303)   - 
Repurchases of common stock   (1,003,420)   - 
Repurchases fees   (800)   - 
Payments of offering costs   -    - 
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES   91,821,298    19,513,000 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS   (9,937,461)   (13,655,351)
CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, BEGINNING OF PERIOD   29,915,074    39,450,352 
CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, END OF PERIOD  $19,977,613   $25,795,001 
           
Supplemental information:          
Interest paid during the period  $4,753,043   $3,530,278 
Cash paid for taxes   692,740    1,006 
Supplemental non-cash information:          
Payment-in-kind interest income and other adjustments to cost   191,699    (703,636)
Net accretion of discount on investments   321,106    312,430 
Amortization of deferred debt financing costs   470,314    272,683 
Stock dividend distribution   914,102    - 

 

See accompanying notes to consolidated financial statements.

 

4

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2021

(unaudited)

 

Company  Industry  Investment Interest Rate/
Maturity
  Original
Acquisition
Date
  Principal/
Number of Shares
   Cost   Fair Value
(c)
   % of
Net Assets
 
Non-control/Non-affiliate investments - 171.9% (b)                             
Targus Holdings, Inc. (d), (h)  Consumer Products  Common Stock  12/31/2009   210,456    1,589,630   $522,061    0.2%
      Total Consumer Products           1,589,630    522,061    0.2%
My Alarm Center, LLC (k)  Consumer Services  Preferred Equity Class A Units
8.00% PIK
  7/14/2017   2,227    2,357,879    -    0.0%
My Alarm Center, LLC (h)  Consumer Services  Preferred Equity Class B Units  7/14/2017   1,797    1,796,880    -    0.0%
My Alarm Center, LLC (h)  Consumer Services  Preferred Equity Class Z Units  9/12/2018   676    712,343    -    0.0%
My Alarm Center, LLC (h)  Consumer Services  Common Stock  7/14/2017   96,224    -    -    0.0%
      Total Consumer Services           4,867,102    -    0.0%
Schoox, Inc. (h), (i)  Corporate Education Software  Series 1 Membership Interest  12/8/2020   226,782    1,050,000    3,107,700    1.0%
      Total Corporate Education Software           1,050,000    3,107,700    1.0%
Passageways, Inc.  Corporate Governance  First Lien Term Loan
(3M USD LIBOR+7.00%), 8.75% Cash, 12/31/2025
  7/5/2018  $5,000,000   $4,972,664    5,050,000    1.6%
Passageways, Inc. (j)  Corporate Governance  Delayed Draw Term Loan
(3M USD LIBOR+7.00%), 8.75% Cash, 12/31/2025
  1/3/2020  $5,000,000    4,981,026    5,050,000    1.6%
Passageways, Inc. (h)  Corporate Governance  Series A Preferred Stock  7/5/2018   2,027,205    1,000,000    7,498,384    2.3%
      Total Corporate Governance           10,953,690    17,598,384    5.5%
New England Dental Partners  Dental Practice Management  First Lien Term Loan
(3M USD LIBOR+8.00%), 8.50% Cash, 11/25/2025
  11/25/2020  $6,555,000    6,496,025    6,632,349    2.1%
New England Dental Partners (j)  Dental Practice Management  Delayed Draw Term Loan
(3M USD LIBOR+8.00%), 8.50% Cash, 11/25/2025
  11/25/2020  $2,150,000    2,130,433    2,175,370    0.7%
      Total Dental Practice Management           8,626,458    8,807,719    2.8%
PDDS Buyer, LLC  Dental Practice Management Software  First Lien Term Loan
(3M USD LIBOR+7.00%), 9.50% Cash, 7/15/2024
  7/15/2019  $14,000,000    13,904,721    14,278,600    4.5%
PDDS Buyer, LLC  Dental Practice Management Software  Delayed Draw Term Loan
(3M USD LIBOR+7.00%), 9.50% Cash, 7/15/2024
  7/15/2019  $7,000,000    6,943,964    7,139,300    2.2%
PDDS Buyer, LLC (h)  Dental Practice Management Software  Series A-1 Preferred Shares  8/10/2020   1,755,831    2,000,000    2,472,430    0.8%
      Total Dental Practice Management Software           22,848,685    23,890,330    7.5%
C2 Educational Systems (d)  Education Services  First Lien Term Loan
(3M USD LIBOR+8.50%), 10.00% Cash, 5/31/2023
  5/31/2017  $18,500,000    18,474,451    16,033,950    5.0%
C2 Education Systems, Inc. (h)  Education Services  Series A-1 Preferred Stock  5/18/2021   3,127    499,904    502,621    0.2%
Texas Teachers of Tomorrow, LLC (h), (i)  Education Services  Common Stock  12/2/2015   750    750,000    1,163,583    0.4%
Texas Teachers of Tomorrow, LLC (d)  Education Services  First Lien Term Loan
(3M USD LIBOR+7.25%), 9.75% Cash, 6/28/2024
  6/28/2019  $25,763,417    25,581,181    25,737,653    8.0%

 

5

 

 

Company  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair Value (c)   % of
Net Assets
 
Zollege PBC  Education Services  First Lien Term Loan
(3M USD LIBOR+5.50%), 6.50% Cash, 5/11/2026
  5/11/2021  $16,000,000    15,860,000    15,840,000    4.9%
Zollege PBC (j)  Education Services  Delayed Draw Term Loan
(3M USD LIBOR+5.50%), 6.50% Cash, 5/11/2026
  5/11/2021  $-    -    -    0.0%
Zollege PBC (h)  Education Services  Class A Units  5/11/2021   250,000    250,000    250,000    0.1%
      Total Education Services           61,415,536    59,527,807    18.6%
Destiny Solutions Inc. (d)  Education Software  First Lien Term Loan
(3M USD LIBOR+7.50%), 9.50% Cash, 10/24/2024
  5/16/2018  $43,500,000    43,240,511    43,500,000    13.6%
Destiny Solutions Inc. (h), (i)  Education Software  Limited Partner Interests  5/16/2018   2,342    2,468,464    3,894,965    1.2%
Identity Automation Systems (d)  Education Software  First Lien Term Loan
(3M USD LIBOR+9.24%), 10.99% Cash, 5/8/2024
  8/25/2014  $17,203,750    17,203,750    17,203,750    5.4%
Identity Automation Systems (h)  Education Software  Common Stock Class A-2 Units  8/25/2014   232,616    232,616    697,848    0.2%
Identity Automation Systems (h)  Education Software  Common Stock Class A-1 Units  3/6/2020   43,715    171,571    189,269    0.1%
GoReact  Education Software  First Lien Term Loan
(3M USD LIBOR+7.50%), 9.50% Cash, 1/17/2025
  1/17/2020  $5,000,000    4,944,183    5,100,000    1.6%
GoReact (j)  Education Software  Delayed Draw Term Loan
(3M USD LIBOR+7.50%), 9.50% Cash, 1/17/2025
  1/17/2020  $1,200,000    1,200,000    1,224,000    0.4%
Kev Software Inc. (a)  Education Software  First Lien Term Loan
(1M USD LIBOR+8.63%), 9.63% Cash, 9/13/2023
  9/13/2018  $17,701,539    17,624,605    17,889,175    5.6%
      Total Education Software           87,085,700    89,699,007    28.1%
Top Gun Pressure Washing, LLC  Facilities Maintenance  First Lien Term Loan
(3M USD LIBOR+7.00%), 9.50% Cash, 12/31/2025
  8/12/2019  $5,000,000    4,964,114    4,958,500    1.5%
Top Gun Pressure Washing, LLC (j)  Facilities Maintenance  Delayed Draw Term Loan
(3M USD LIBOR+7.00%), 9.50% Cash, 12/31/2025
  8/12/2019  $5,500,000    5,449,645    5,454,350    1.8%
TG Pressure Washing Holdings, LLC (f), (h)  Facilities Maintenance  Preferred Equity  8/12/2019   488,148    488,148    318,329    0.1%
      Total Facilities Maintenance           10,901,907    10,731,179    3.4%
Davisware, LLC  Field Service Management  First Lien Term Loan
(3M USD LIBOR+7.00%), 9.00% Cash, 7/31/2024
  9/6/2019  $3,000,000    2,979,495    3,032,400    0.9%
Davisware, LLC  Field Service Management  Delayed Draw Term Loan
(3M USD LIBOR+7.00%), 9.00% Cash, 7/31/2024
  9/6/2019  $977,790    974,822    988,350    0.3%
      Total Field Service Management           3,954,317    4,020,750    1.2%
GDS Software Holdings, LLC (h)  Financial Services  Common Stock Class A Units  8/23/2018   250,000    250,000    445,913    0.1%
      Total Financial Services           250,000    445,913    0.1%
Ohio Medical, LLC (h)  Healthcare Products Manufacturing  Common Stock  1/15/2016   5,000    380,353    564,042    0.2%
      Total Healthcare Products Manufacturing           380,353    564,042    0.2%
Axiom Parent Holdings, LLC (h)  Healthcare Services  Common Stock Class A Units  6/19/2018   400,000    400,000    900,986    0.3%
Axiom Purchaser, Inc. (d)  Healthcare Services  First Lien Term Loan
(3M USD LIBOR+6.00%), 7.75% Cash, 6/19/2023
  6/19/2018  $10,000,000    9,959,761    10,059,000    3.1%
Axiom Purchaser, Inc. (d)  Healthcare Services  Delayed Draw Term Loan
(3M USD LIBOR+6.00%), 7.75% Cash, 6/19/2023
  6/19/2018  $6,000,000    5,965,638    6,035,400    1.9%
ComForCare Health Care  Healthcare Services  First Lien Term Loan
(3M USD LIBOR+7.75%), 8.75% Cash, 1/31/2025
  1/31/2017  $25,000,000    24,875,298    24,957,500    7.8%
      Total Healthcare Services           41,200,697    41,952,886    13.1%

 

6

 

 

Company  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair Value (c)   % of
Net Assets
 
Greenphire, Inc. (h), (i)  Healthcare Software  Series A Preferred Stock  3/24/2021   102    10,181,700    10,381,661    3.2%
TRC HemaTerra, LLC (h)  Healthcare Software  Class D Membership Interests  4/15/2019   2,241    2,310,929    2,816,291    0.9%
HemaTerra Holding Company, LLC  Healthcare Software  First Lien Term Loan
(3M USD LIBOR+6.75%), 8.25% Cash, 1/31/2026
  4/15/2019  $36,000,000    35,660,359    35,776,800    11.2%
HemaTerra Holding Company, LLC (d), (j)  Healthcare Software  Delayed Draw Term Loan
(3M USD LIBOR+6.75%), 8.25% Cash, 1/31/2026
  4/15/2019  $12,000,000    11,919,627    11,925,600    3.7%
Procurement Partners, LLC  Healthcare Software  First Lien Term Loan
(3M USD LIBOR+6.50%), 7.50% Cash, 11/12/2025
  11/12/2020  $8,000,000    7,928,456    8,023,200    2.5%
Procurement Partners, LLC (j)  Healthcare Software  Delayed Draw Term Loan
(3M USD LIBOR+6.50%), 7.50% Cash, 11/12/2025
  11/12/2020  $-    -    -    0.0%
Procurement Partners Holdings LLC (h)  Healthcare Software     11/12/2020   300,000    300,000    339,111    0.1%
      Total Healthcare Software           68,301,071    69,262,663    21.6%
Roscoe Medical, Inc. (d), (h)  Healthcare Supply  Common Stock  3/26/2014   5,081    508,077    187,153    0.1%
Roscoe Medical, Inc.  Healthcare Supply  Second Lien Term Loan
11.25% Cash, 6/28/2021
  3/26/2014  $5,141,413    5,141,413    5,141,413    1.6%
      Total Healthcare Supply           5,649,490    5,328,566    1.7%
Book4Time, Inc. (a)  Hospitality/Hotel  First Lien Term Loan
(3M USD LIBOR+8.50%), 10.25%, 12/22/2025
  12/22/2020  $3,136,517    3,108,278    3,105,152    1.0%
Book4Time, Inc. (a), (j)  Hospitality/Hotel  Delayed Draw Term Loan
(3M USD LIBOR+8.50%), 10.25%, 12/22/2025
  12/22/2020  $-    -    -    0.0%
Book4Time, Inc. (a), (i)  Hospitality/Hotel  Class A Preferred Shares  12/22/2020   200,000    156,826    200,000    0.1%
Knowland Group, LLC  Hospitality/Hotel  Second Lien Term Loan
(3M USD LIBOR+8.00%), 10.00% Cash/1.00% PIK, 5/9/2024
  11/9/2018  $15,767,918    15,767,918    11,280,368    3.5%
Sceptre Hospitality Resources, LLC  Hospitality/Hotel  First Lien Term Loan
(1M USD LIBOR+9.00%), 10.00% Cash, 4/27/2025
  4/27/2020  $3,000,000    2,975,728    3,000,000    0.9%
      Total Hospitality/Hotel           22,008,750    17,585,520    5.5%
Granite Comfort, LP  HVAC Services and Sales  First Lien Term Loan
(1M USD LIBOR+9.00%), 10.00% Cash, 11/16/2025
  11/16/2020  $20,000,000    19,815,082    19,950,000    6.2%
Granite Comfort, LP (j)  HVAC Services and Sales  Delayed Draw Term Loan
(1M USD LIBOR+9.00%), 10.00% Cash, 11/16/2025
  11/16/2020  $-    -    -    0.0%
      Total HVAC Services and Sales           19,815,082    19,950,000    6.2%
Vector Controls Holding Co., LLC (d)  Industrial Products  First Lien Term Loan
11.50% (9.75% Cash/1.75% PIK), 3/6/2022
  3/6/2013  $6,843,746    6,843,746    6,843,746    2.1%
Vector Controls Holding Co., LLC (d), (h)  Industrial Products  Warrants to Purchase Limited Liability Company Interests, Expires 11/30/2027  5/31/2015   343    -    2,188,389    0.7%
      Total Industrial Products           6,843,746    9,032,135    2.8%
CLEO Communications Holding, LLC (d)  IT Services  First Lien Term Loan
(3M USD LIBOR+8.00%), 9.00% Cash/2.00% PIK, 3/31/2022
  3/31/2017  $14,146,020    14,138,542    14,249,286    4.4%
CLEO Communications Holding, LLC (d), (j)  IT Services  Delayed Draw Term Loan
(3M USD LIBOR+8.00%), 9.00% Cash/2.00% PIK, 3/31/2022
  3/31/2017  $20,556,466    20,507,075    20,706,528    6.5%
LogicMonitor, Inc.  IT Services  First Lien Term Loan
(3M USD LIBOR+5.00), 6.00% Cash, 5/17/2023
  3/20/2020  $23,000,000    22,883,641    23,101,200    7.2%
      Total IT Services           57,529,258    58,057,014    18.1%
inMotionNow, Inc.  Marketing Services  First Lien Term Loan
(3M USD LIBOR+7.50), 10.00% Cash, 5/15/2024
  5/15/2019  $12,200,000    12,124,363    12,389,100    3.9%

 

7

 

 

Company  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair Value (c)   % of
Net Assets
 
inMotionNow, Inc.  Marketing Services  Delayed Draw Term Loan
(3M USD LIBOR+7.50) 10.00% Cash, 5/15/2024
  5/15/2019  $5,000,000    4,963,878    5,077,500    1.6%
      Total Marketing Services           17,088,241    17,466,600    5.5%
Omatic Software, LLC  Non-profit Services  First Lien Term Loan
(3M USD LIBOR+8.00%), 9.75% Cash, 5/29/2023
  5/29/2018  $5,500,000    5,474,886    5,500,000    1.7%
      Total Non-profit Services           5,474,886    5,500,000    1.7%
Emily Street Enterprises, L.L.C.  Office Supplies  Senior Secured Note
(3M USD LIBOR+8.50%), 10.00% Cash, 12/31/2023
  12/28/2012  $3,300,000    3,300,000    3,248,190    1.0%
Emily Street Enterprises, L.L.C. (h)  Office Supplies  Warrant Membership Interests
Expires 12/28/2022
  12/28/2012   49,318    400,000    151,202    0.0%
      Total Office Supplies           3,700,000    3,399,392    1.0%
Apex Holdings Software Technologies, LLC  Payroll Services  First Lien Term Loan
(3M USD LIBOR+8.00%), 9.00% Cash, 9/21/2024
  9/21/2016  $18,000,000    17,983,170    17,380,801    5.3%
Apex Holdings Software Technologies, LLC  Payroll Services  Delayed Draw Term Loan
(3M USD LIBOR+8.00%), 9.00% Cash, 9/21/2024
  10/1/2018  $1,000,000    994,942    965,600    0.3%
      Total Payroll Services           18,978,112    18,346,401    5.6%
Lexipol, LLC (h), (i)  Public Safety/Local Government Software  Series A Preferred Stock  3/30/2021   102    10,204,900    10,204,900    3.2%
      Total Public Safety/Local Government Software           10,204,900    10,204,900    3.2%
Buildout, Inc.  Real Estate Services  First Lien Term Loan
(3M USD LIBOR+7.75%), 9.25% Cash, 7/9/2025
  7/9/2020  $14,000,000    13,880,144    13,976,200    4.4%
Buildout, Inc.  Real Estate Services  Delayed Draw Term Loan
(3M USD LIBOR+7.75%), 9.25% Cash, 7/9/2025
  2/12/2021  $3,000,000    2,971,412    2,994,900    0.8%
Buildout, Inc. (h), (i)  Real Estate Services  Limited Partner Interests  7/9/2020   1,071    1,071,301    1,215,084    0.4%
      Total Real Estate Services           17,922,857    18,186,184    5.6%
TMAC Acquisition Co., LLC (k)  Restaurant  Unsecured Term Loan
8.00% PIK, 9/01/2023
  3/1/2018  $2,261,017    2,261,017    2,169,383    0.7%
      Total Restaurant           2,261,017    2,169,383    0.7%
ArbiterSports, LLC (d)  Sports Management  First Lien Term Loan
(3M USD LIBOR+6.50%), 8.25% Cash, 2/21/2025
  2/21/2020  $26,000,000    25,818,242    24,603,800    7.6%
ArbiterSports, LLC (d)  Sports Management  Delayed Draw Term Loan
(3M USD LIBOR+6.50%), 8.25% Cash, 2/21/2025
  2/21/2020  $1,000,000    1,000,000    946,300    0.3%
      Total Sports Management           26,818,242    25,550,100    7.9%
Avionte Holdings, LLC (h)  Staffing Services  Class A Units  1/8/2014   100,000    100,000    968,628    0.3%
      Total Staffing Services           100,000    968,628    0.3%
National Waste Partners (d)  Waste Services  Second Lien Term Loan
10.00% Cash, 2/13/2022
  2/13/2017  $9,000,000    8,988,368    9,000,000    2.8%
      Total Waste Services           8,988,368    9,000,000    2.8%
Sub Total Non-control/Non-affiliate investments                 546,808,095    550,875,264    171.9%
                              
Affiliate investments - 12.4% (b)                             
Artemis Wax Corp. (f), (j)  Consumer Services  Delayed Draw Term Loan
(1M USD LIBOR+9.00%), 12.00% Cash, 5/20/2026
  5/20/2021  $15,295,662    15,142,705    15,142,705    4.7%
Artemis Wax Corp. (f) (h)  Consumer Services  Series B-1 Preferred Stock  5/20/2021   934,463    1,500,000    1,500,000    0.5%
Artemis Wax Corp. (f) (h)  Consumer Services  Series C Preferred Stock  5/20/2021   4,099    4,099,260    4,099,261    1.3%
      Total Consumer Services           20,741,965    20,741,966    6.5%

 

8

 

 

Company  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair Value (c)   % of
Net Assets
 
GreyHeller LLC (f)  Cyber Security  First Lien Term Loan
(3M USD LIBOR+9.00%), 10.00% Cash, 12/31/2025
  11/17/2016  $7,000,000    6,988,553    7,000,000    2.2%
GreyHeller LLC (d), (f), (j)  Cyber Security  Delayed Draw Term Loan
(3M USD LIBOR+9.00%), 10.00% Cash, 12/31/2025
  10/19/2020  $6,250,000    6,193,810    6,250,001    1.9%
GreyHeller LLC (f), (h)  Cyber Security  Series A Preferred Units  11/17/2016   850,000    850,000    5,880,742    1.8%
      Total Cyber Security           14,032,363    19,130,743    5.9%
Sub Total Affiliate investments                 34,774,328    39,872,709    12.4%
                              
Control investments - 27.2% (b)                             
Netreo Holdings, LLC (g)  IT Services  First Lien Term Loan
(3M USD LIBOR +6.25%), 9.00% Cash/2.75% PIK, 12/31/2025
  7/3/2018  $5,332,239    5,304,439    5,361,034    1.6%
Netreo Holdings, LLC (g), (j)  IT Services  Delayed Draw Term Loan
(3M USD LIBOR +6.25%), 9.00% Cash/2.75% PIK, 12/31/2025
  5/26/2020  $10,241,069    10,142,979    10,296,371    3.2%
Netreo Holdings, LLC (g), (h)  IT Services  Common Stock Class A Unit  7/3/2018   4,600,677    8,344,500    17,946,180    5.6%
      Total IT Services           23,791,918    33,603,585    10.4%
Saratoga Investment Corp. CLO 2013-1, Ltd. (a), (e), (g)  Structured Finance Securities  Other/Structured Finance Securities
15.87%, 4/20/2033
  1/22/2008  $111,000,000    33,411,912    35,546,307    11.1%
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-R-3 Note (a), (g)  Structured Finance Securities  Other/Structured Finance Securities
(3M USD LIBOR+10.00%), 10.13%, 4/20/2033
  2/26/2021  $17,875,000    17,875,000    17,875,000    5.7%
      Total Structured Finance Securities           51,286,912    53,421,307    16.8%
Sub Total Control investments                 75,078,830    87,024,892    27.2%
TOTAL INVESTMENTS - 211.5% (b)                $656,661,253   $677,772,865    211.5%

 

   Number of
Shares
   Cost   Fair Value   % of
Net Assets
 
Cash and cash equivalents and cash and cash equivalents, reserve accounts - 6.1% (b)                    
U.S. Bank Money Market (l)   19,659,681   $19,659,681   $19,659,681    6.1%
Total cash and cash equivalents and cash and cash equivalents, reserve accounts   19,659,681   $19,659,681   $19,659,681    6.1%

 

(a)Represents an ineligible investment as defined under Section 55(a) of the Investment Company Act of 1940, as amended. As of May 31, 2021 non-qualifying assets represent 8.4% of the Company’s portfolio at fair value. As a BDC, the Company can only invest 30% of its portfolio in non-qualifying assets.
(b)Percentages are based on net assets of $320,344,756 as of May 31, 2021.
(c)Because there is no readily available market value 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 a senior secured revolving credit facility (see Note 7 to the consolidated financial statements).
(e)This investment does not have a stated interest rate that is payable thereon. As a result, the 15.87% 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 Investment Company Act, this portfolio company is an Affiliate as we own between 5.0% and 25.0% of the voting securities. Transactions during the quarter ended May 31, 2021 in which the issuer was an Affiliate are as follows:

 

9

 

 

Company  Purchases   Sales   Total Interest from Investments   Management
Fee Income
   Net Realized
Gain (Loss) from
Investments
   Net Change in Unrealized Appreciation (Depreciation) 
Artemis Wax Corp.  $20,732,455   $        -   $31,122   $        -   $        -   $1 
GreyHeller LLC   3,960,000    -    309,390    -    -    1,995,811 
Total  $24,692,455   $-   $340,512   $-   $-   $1,995,812 

 

(g)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 quarter ended May 31, 2021 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   Management
Fee Income
   Net Realized
Gain (Loss) from Investments
   Net Change in Unrealized Appreciation (Depreciation) 
Netreo Holdings, LLC  $14,104,500   $         -   $279,628   $-   $         2   $4,224,061 
Saratoga Investment Corp. CLO 2013-1, Ltd.   -    -    1,133,296    818,232    -    4,531,306 
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-R-3 Note   -    -    465,738    -    -    (454,025)
Total  $14,104,500   $-   $1,878,661   $818,232   $2   $8,301,342 

 

(h)Non-income producing at May 31, 2021.
(i)Includes securities issued by an affiliate of the company.
(j)All or a portion of this investment has an unfunded commitment as of May 31, 2021. (see Note 8 to the consolidated financial statements).
(k)As of May 31, 2021, the investment was on non-accrual status. The fair value of these investments was approximately $2.2 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 May 31, 2021.

 

LIBOR - London Interbank Offered Rate

 

1M USD LIBOR - The 1 month USD LIBOR rate as of May 31, 2021 was 0.09%.

3M USD LIBOR - The 3 month USD LIBOR rate as of May 31, 2021 was 0.13%.

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

 

See accompanying notes to consolidated financial statements.

 

10

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

February 28, 2021

 

Company  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair Value (c)   % of
Net Assets
 
Non-control/Non-affiliate investments - 154.5% (b)                             
Targus Holdings, Inc. (d), (h)  Consumer Products  Common Stock  12/31/2009   210,456    1,589,630   $475,116    0.2%
      Total Consumer Products           1,589,630    475,116    0.2%
My Alarm Center, LLC (k)  Consumer Services  Preferred Equity Class A Units
8.00% PIK
  7/14/2017   2,227    2,357,879    -    0.0%
My Alarm Center, LLC (h)  Consumer Services  Preferred Equity Class B Units  7/14/2017   1,797    1,796,880    -    0.0%
My Alarm Center, LLC (h)  Consumer Services  Preferred Equity Class Z Units  9/12/2018   676    712,343    181,240    0.1%
My Alarm Center, LLC (h)  Consumer Services  Common Stock  7/14/2017   96,224    -    -    0.0%
      Total Consumer Services           4,867,102    181,240    0.1%
Schoox, Inc. (h), (i)  Corporate Education Software  Series 1 Membership Interest  12/8/2020   226,782    1,050,000    1,050,000    0.3%
      Total Corporate Education Software           1,050,000    1,050,000    0.3%
Passageways, Inc.  Corporate Governance  First Lien Term Loan
(3M USD LIBOR+7.00%), 8.75% Cash, 12/31/2025
  7/5/2018  $5,000,000   $4,972,250    5,050,000    1.7%
Passageways, Inc. (j)  Corporate Governance  Delayed Draw Term Loan
(3M USD LIBOR+7.00%), 8.75% Cash, 12/31/2025
  1/3/2020  $5,000,000    4,980,871    5,050,000    1.7%
Passageways, Inc. (h)  Corporate Governance  Series A Preferred Stock  7/5/2018   2,027,205    1,000,000    3,164,579    1.0%
      Total Corporate Governance           10,953,121    13,264,579    4.4%
New England Dental Partners  Dental Practice Management  First Lien Term Loan
(3M USD LIBOR+8.00%), 8.50% Cash, 11/25/2025
  11/25/2020  $6,555,000    6,491,331    6,489,450    2.1%
New England Dental Partners (j)  Dental Practice Management  Delayed Draw Term Loan
(3M USD LIBOR+8.00%), 8.50% Cash, 11/25/2025
  11/25/2020  $650,000    644,419    643,500    0.2%
      Total Dental Practice Management           7,135,750    7,132,950    2.3%
PDDS Buyer, LLC  Dental Practice Management Software  First Lien Term Loan
(3M USD LIBOR+7.00%), 9.50% Cash, 7/15/2024
  7/15/2019  $14,000,000    13,895,777    14,278,600    4.7%
PDDS Buyer, LLC  Dental Practice Management Software  Delayed Draw Term Loan
(3M USD LIBOR+7.00%), 9.50% Cash, 7/15/2024
  7/15/2019  $7,000,000    6,938,964    7,139,300    2.3%
PDDS Buyer, LLC (h)  Dental Practice Management Software  Series A-1 Preferred Shares  8/10/2020   1,755,831    2,000,000    2,240,946    0.7%
      Total Dental Practice Management Software           22,834,741    23,658,846    7.7%
C2 Educational Systems (d)  Education Services  First Lien Term Loan
(3M USD LIBOR+8.50%), 10.00% Cash, 5/31/2023
  5/31/2017  $16,000,000    15,998,379    13,499,200    4.4%
Texas Teachers of Tomorrow, LLC (h), (i)  Education Services  Common Stock  12/2/2015   750    750,000    1,011,596    0.3%
Texas Teachers of Tomorrow, LLC (d)  Education Services  First Lien Term Loan
(3M USD LIBOR+7.25%), 9.75% Cash, 6/28/2024
  6/28/2019  $25,947,024    25,748,711    25,874,372    8.5%
      Total Education Services           42,497,090    40,385,168    13.2%
Destiny Solutions Inc. (d)  Education Software  First Lien Term Loan
(3M USD LIBOR+7.50%), 9.50% Cash, 10/24/2024
  5/16/2018  $43,500,000    43,204,446    43,630,500    14.3%
Destiny Solutions Inc. (h), (i)  Education Software  Limited Partner Interests  5/16/2018   2,342    2,468,464    3,069,267    1.0%
Identity Automation Systems (d)  Education Software  First Lien Term Loan
(3M USD LIBOR+9.24%), 10.99% Cash, 5/8/2024
  8/25/2014  $17,247,500    17,247,500    17,357,884    5.7%

 

11

 

 

Company  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair Value (c)   % of
Net Assets
 
Identity Automation Systems (h)  Education Software  Common Stock Class A-2 Units  8/25/2014   232,616    232,616    725,726    0.2%
Identity Automation Systems (h)  Education Software  Common Stock Class A-1 Units  3/6/2020   43,715    171,571    185,553    0.1%
GoReact  Education Software  First Lien Term Loan
(3M USD LIBOR+7.50%), 9.50% Cash, 1/17/2025
  1/17/2020  $5,000,000    4,940,297    5,100,000    1.7%
GoReact (j)  Education Software  Delayed Draw Term Loan
(3M USD LIBOR+7.50%), 9.50% Cash, 1/17/2025
  1/17/2020  $-    -    -    0.0%
Kev Software Inc. (a)  Education Software  First Lien Term Loan
(1M USD LIBOR+8.63%), 9.63% Cash, 9/13/2023
  9/13/2018  $17,835,914    17,745,629    18,021,407    5.9%
      Total Education Software           86,010,523    88,090,337    28.9%
Davisware, LLC  Field Service Management  First Lien Term Loan
(3M USD LIBOR+7.00%), 9.00% Cash, 7/31/2024
  9/6/2019  $3,000,000    2,977,590    3,030,000    1.0%
Davisware, LLC  Field Service Management  Delayed Draw Term Loan
(3M USD LIBOR+7.00%), 9.00% Cash, 7/31/2024
  9/6/2019  $977,790    974,399    987,568    0.3%
      Total Field Service Management           3,951,989    4,017,568    1.3%
GDS Software Holdings, LLC (h)  Financial Services  Common Stock Class A Units  8/23/2018   250,000    250,000    418,531    0.1%
      Total Financial Services           250,000    418,531    0.1%
Ohio Medical, LLC (h)  Healthcare Products Manufacturing  Common Stock  1/15/2016   5,000    380,353    566,592    0.2%
      Total Healthcare Products Manufacturing           380,353    566,592    0.2%
Axiom Parent Holdings, LLC (h)  Healthcare Services  Common Stock Class A Units  6/19/2018   400,000    400,000    1,415,301    0.5%
Axiom Purchaser, Inc. (d)  Healthcare Services  First Lien Term Loan
(3M USD LIBOR+6.00%), 7.75% Cash, 6/19/2023
  6/19/2018  $10,000,000    9,955,177    10,059,000    3.3%
Axiom Purchaser, Inc. (d)  Healthcare Services  Delayed Draw Term Loan
(3M USD LIBOR+6.00%), 7.75% Cash, 6/19/2023
  6/19/2018  $6,000,000    5,961,748    6,035,400    2.0%
ComForCare Health Care  Healthcare Services  First Lien Term Loan
(3M USD LIBOR+7.75%), 8.75% Cash, 1/31/2025
  1/31/2017  $25,000,000    24,871,639    24,900,000    8.2%
      Total Healthcare Services           41,188,564    42,409,701    14.0%
TRC HemaTerra, LLC (h)  Healthcare Software  Class D Membership Interests  4/15/2019   2,000,000    2,000,000    2,572,002    0.8%
HemaTerra Holding Company, LLC  Healthcare Software  First Lien Term Loan
(3M USD LIBOR+6.75%), 9.25% Cash, 4/15/2024
  4/15/2019  $6,000,000    5,956,593    6,060,000    2.0%
HemaTerra Holding Company, LLC (d), (j)  Healthcare Software  Delayed Draw Term Loan
(3M USD LIBOR+6.75%), 9.25% Cash, 4/15/2024
  4/15/2019  $12,000,000    11,914,035    12,120,000    4.0%
Procurement Partners, LLC  Healthcare Software  First Lien Term Loan
(3M USD LIBOR+6.50%), 7.50% Cash, 11/12/2025
  11/12/2020  $8,000,000    7,924,230    7,920,000    2.6%
Procurement Partners, LLC (j)  Healthcare Software  Delayed Draw Term Loan
(3M USD LIBOR+6.50%), 7.50% Cash, 11/12/2025
  11/12/2020  $-    -    -    0.0%
Procurement Partners Holdings LLC (h)  Healthcare Software     11/12/2020   300,000    300,000    300,000    0.1%
      Total Healthcare Software           28,094,858    28,972,002    9.5%
Roscoe Medical, Inc. (d), (h)  Healthcare Supply  Common Stock  3/26/2014   5,081    508,077    280,346    0.1%
Roscoe Medical, Inc.  Healthcare Supply  Second Lien Term Loan
11.25% Cash, 6/28/2021
  3/26/2014  $5,141,413    5,141,413    5,141,413    1.7%
      Total Healthcare Supply           5,649,490    5,421,759    1.8%
Book4Time, Inc. (a)  Hospitality/Hotel  First Lien Term Loan
(3M USD LIBOR+8.50%), 10.25%, 12/22/2025
  12/22/2020  $3,136,517    3,105,788    3,105,152    1.0%
Book4Time, Inc. (a), (j)  Hospitality/Hotel  Delayed Draw Term Loan
(3M USD LIBOR+8.50%), 10.25%, 12/22/2025
  12/22/2020  $-    -    -    0.0%

 

12

 

 

Company  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair Value (c)   % of
Net Assets
 
Book4Time, Inc. (a), (i)  Hospitality/Hotel  Class A Preferred Shares  12/22/2020   200,000    156,826    156,826    0.1%
Knowland Group, LLC  Hospitality/Hotel  Second Lien Term Loan
(3M USD LIBOR+8.00%), 10.00% Cash, 5/9/2024
  11/9/2018  $15,767,918    15,767,918    10,788,409    3.5%
Sceptre Hospitality Resources, LLC  Hospitality/Hotel  First Lien Term Loan
(1M USD LIBOR+9.00%), 10.00% Cash, 4/27/2025
  4/27/2020  $3,000,000    2,973,387    3,030,000    1.0%
      Total Hospitality/Hotel           22,003,919    17,080,387    5.6%
Granite Comfort, LP  HVAC Services and Sales  First Lien Term Loan
(1M USD LIBOR+9.00%), 10.00% Cash, 11/16/2025
  11/16/2020  $7,000,000    6,932,689    6,950,300    2.3%
Granite Comfort, LP  HVAC Services and Sales  Delayed Draw Term Loan
(1M USD LIBOR+9.00%), 10.00% Cash, 11/16/2025
  11/16/2020  $8,000,000    7,922,181    7,943,200    2.6%
      Total HVAC Services and Sales           14,854,870    14,893,500    4.9%
Vector Controls Holding Co., LLC (d)  Industrial Products  First Lien Term Loan
11.50% (9.75% Cash/1.75% PIK), 3/6/2022
  3/6/2013  $7,021,046    7,021,046    7,021,046    2.3%
Vector Controls Holding Co., LLC (d), (h)  Industrial Products  Warrants to Purchase Limited Liability Company Interests, Expires 11/30/2027  5/31/2015   343    -    2,025,598    0.7%
      Total Industrial Products           7,021,046    9,046,644    3.0%
CLEO Communications Holding, LLC (d)  IT Services  First Lien Term Loan
(3M USD LIBOR+8.00%), 9.00% Cash/2.00% PIK, 3/31/2022
  3/31/2017  $14,073,964    14,064,807    14,176,704    4.7%
CLEO Communications Holding, LLC (d), (j)  IT Services  Delayed Draw Term Loan
(3M USD LIBOR+8.00%), 9.00% Cash/2.00% PIK, 3/31/2022
  3/31/2017  $20,451,756    20,388,504    20,601,054    6.8%
LogicMonitor, Inc.  IT Services  First Lien Term Loan
(3M USD LIBOR+5.00), 6.00% Cash, 5/17/2023
  3/20/2020  $23,000,000    22,865,749    23,089,700    7.6%
      Total IT Services           57,319,060    57,867,458    19.1%
inMotionNow, Inc.  Marketing Services  First Lien Term Loan
(3M USD LIBOR+7.50), 10.00% Cash, 5/15/2024
  5/15/2019  $12,200,000    12,116,232    12,322,000    4.1%
inMotionNow, Inc.  Marketing Services  Delayed Draw Term Loan
(3M USD LIBOR+7.50) 10.00% Cash, 5/15/2024
  5/15/2019  $5,000,000    4,960,820    5,050,000    1.7%
      Total Marketing Services           17,077,052    17,372,000    5.8%
Omatic Software, LLC  Non-profit Services  First Lien Term Loan
(3M USD LIBOR+8.00%), 9.75% Cash, 5/29/2023
  5/29/2018  $5,500,000    5,470,787    5,554,450    1.8%
      Total Non-profit Services           5,470,787    5,554,450    1.8%
Emily Street Enterprises, L.L.C.  Office Supplies  Senior Secured Note
(3M USD LIBOR+8.50%), 10.00% Cash, 12/31/2023
  12/28/2012  $3,300,000    3,300,000    3,287,460    1.1%
Emily Street Enterprises, L.L.C. (h)  Office Supplies  Warrant Membership Interests Expires 12/28/2022  12/28/2012   49,318    400,000    322,853    0.1%
      Total Office Supplies           3,700,000    3,610,313    1.2%
Apex Holdings Software Technologies, LLC  Payroll Services  First Lien Term Loan
(3M USD LIBOR+8.00%), 9.00% Cash, 9/21/2024
  9/21/2016  $18,000,000    17,981,413    17,368,200    5.7%
Apex Holdings Software Technologies, LLC  Payroll Services  Delayed Draw Term Loan
(3M USD LIBOR+8.00%), 9.00% Cash, 9/21/2024
  10/1/2018  $1,000,000    994,557    964,900    0.3%
      Total Payroll Services           18,975,970    18,333,100    6.0%
Village Realty Holdings LLC  Property Management  First Lien Term Loan
(3M USD LIBOR+6.50%), 8.75% Cash, 10/8/2024
  10/8/2019  $7,250,000    7,189,591    7,395,000    2.4%
Village Realty Holdings LLC (j)  Property Management  Delayed Draw Term Loan
(3M USD LIBOR+6.50%), 8.75% Cash, 10/8/2024
  10/8/2019  $4,876,322    4,838,617    4,973,850    1.6%

 

13

 

 

Company  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair Value (c)   % of
Net Assets
 
V Rental Holdings LLC (h)  Property Management  Class A-1 Membership Units  10/8/2019   122,578    365,914    2,208,681    0.7%
      Total Property Management           12,394,122    14,577,531    4.7%
Buildout, Inc.  Real Estate Services  First Lien Term Loan
(3M USD LIBOR+7.75%), 9.25% Cash, 7/9/2025
  7/9/2020  $14,000,000    13,873,317    13,952,400    4.6%
Buildout, Inc.  Real Estate Services  Delayed Draw Term Loan
(3M USD LIBOR+7.75%), 9.25% Cash, 7/9/2025
  2/12/2021  $3,000,000    2,970,361    2,989,800    1.0%
Buildout, Inc. (h), (i)  Real Estate Services  Limited Partner Interests  7/9/2020   1,071    1,071,301    1,090,002    0.4%
      Total Real Estate Services           17,914,979    18,032,202    6.0%
TMAC Acquisition Co., LLC (k)  Restaurant  Unsecured Term Loan
8.00% PIK, 9/01/2023
  3/1/2018  $2,261,017    2,261,017    2,140,911    0.7%
      Total Restaurant           2,261,017    2,140,911    0.7%
ArbiterSports, LLC (d)  Sports Management  First Lien Term Loan
(3M USD LIBOR+6.50%), 8.25% Cash, 2/21/2025
  2/21/2020  $26,000,000    25,800,743    24,525,800    8.1%
ArbiterSports, LLC (d)  Sports Management  Delayed Draw Term Loan
(3M USD LIBOR+6.50%), 8.25% Cash, 2/21/2025
  2/21/2020  $1,000,000    1,000,000    943,300    0.3%
      Total Sports Management           26,800,743    25,469,100    8.4%
Avionte Holdings, LLC (h)  Staffing Services  Class A Units  1/8/2014   100,000    100,000    924,509    0.3%
      Total Staffing Services           100,000    924,509    0.3%
National Waste Partners (d)  Waste Services  Second Lien Term Loan
10.00% Cash, 2/13/2022
  2/13/2017  $9,000,000    8,981,436    9,000,000    3.0%
      Total Waste Services           8,981,436    9,000,000    3.0%
Sub Total Non-control/Non-affiliate investments                 471,328,212    469,946,494    154.5%
                              
Affiliate investments - 6.4% (b)                             
GreyHeller LLC (f)  Cyber Security  First Lien Term Loan
(3M USD LIBOR+11.00%), 12.00% Cash, 12/31/2025
  11/17/2016  $7,000,000    6,988,549    7,000,000    2.3%
GreyHeller LLC (d), (f), (j)  Cyber Security  Delayed Draw Term Loan
(3M USD LIBOR+11.00%), 12.00% Cash, 12/31/2025
  10/19/2020  $2,250,000    2,233,173    2,250,000    0.7%
GreyHeller LLC (f), (h)  Cyber Security  Series A Preferred Units  11/17/2016   850,000    850,000    3,924,291    1.3%
      Total Cyber Security           10,071,722    13,174,291    4.3%
Top Gun Pressure Washing, LLC (f)  Facilities Maintenance  First Lien Term Loan
(3M USD LIBOR+7.00%), 9.50% Cash, 8/12/2024
  8/12/2019  $5,000,000    4,961,639    4,491,500    1.5%
Top Gun Pressure Washing, LLC (f), (j)  Facilities Maintenance  Delayed Draw Term Loan
(3M USD LIBOR+7.00%), 9.50% Cash, 8/12/2024
  8/12/2019  $1,825,000    1,810,198    1,639,397    0.6%
TG Pressure Washing Holdings, LLC (f), (h)  Facilities Maintenance  Preferred Equity  8/12/2019   488,148    488,148    62,552    0.0%
      Total Facilities Maintenance           7,259,985    6,193,449    2.1%
Sub Total Affiliate investments                 17,331,707    19,367,740    6.4%
                              
Control investments - 21.4% (b)                             
Netreo Holdings, LLC (g)  IT Services  First Lien Term Loan
(3M USD LIBOR +6.25%), 9.00% Cash/2.75% PIK,
12/31/2025