UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

Form 10-Q

 

 

 

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

 

For the Quarterly Period Ended August 31, 2022

 

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

 

Commission File No. 814-00732

 

 

 

SARATOGA INVESTMENT CORP.

(Exact name of registrant as specified in its charter)

 

 

 

Maryland   20-8700615

(State or other jurisdiction of

incorporation or organization) 

 

(I.R.S. Employer

Identification Number) 

 

535 Madison Avenue

New York, New York 10022

(Address of principal executive offices)

 

(212) 906-7800

(Registrant’s telephone number, including area code)

 

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.001 per share   SAR  

The New York Stock Exchange 

6.00% Notes due 2027   SAT  

The New York Stock Exchange 

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

The number of outstanding common shares of the registrant as of October 4, 2022 was 11,900,212.

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

   

Page 

PART I. FINANCIAL INFORMATION    
       
Item 1. Consolidated Financial Statements   1
       
  Consolidated Statements of Assets and Liabilities as of August 31, 2022 (unaudited) and February 28, 2022   1
       
  Consolidated Statements of Operations for the three and six months ended August 31, 2022 (unaudited) and August 31, 2021 (unaudited)   2
       
  Consolidated Statements of Changes in Net Assets for three and six months ended August 31, 2022 (unaudited) and August 31, 2021 (unaudited)   3
       
 

Consolidated Statements of Cash Flows for the six months ended August 31, 2022 (unaudited) and August 31, 2021 (unaudited)

  4
       
  Consolidated Schedules of Investments as of August 31, 2022 (unaudited) and February 28, 2022   5
       
  Notes to Consolidated Financial Statements as of August 31, 2022 (unaudited)   19
       
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   86
       
Item 3. Quantitative and Qualitative Disclosures About Market Risk   125
       
Item 4. Controls and Procedures   126
       
PART II.  OTHER INFORMATION   127
     
Item 1. Legal Proceedings   127
       
Item 1A. Risk Factors   127
       
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   127
       
Item 3. Defaults Upon Senior Securities   127
       
Item 4. Mine Safety Disclosures   127
       
Item 5. Other Information   127
       
Item 6. Exhibits   128
       
Signatures   130

 

i

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

Saratoga Investment Corp.

Consolidated Statements of Assets and Liabilities

(unaudited)

 

  

August 31,

2022

   February 28,
2022
 
   (unaudited)     
ASSETS        
Investments at fair value        
Non-control/Non-affiliate investments (amortized cost of $776,527,328 and $654,965,044, respectively)  $775,408,041   $668,358,516 
Affiliate investments (amortized cost of $80,445,967 and $46,224,927, respectively)   85,623,204    48,234,124 
Control investments (amortized cost of $98,963,250 and $95,058,356, respectively)   93,632,423    100,974,715 
Total investments at fair value (amortized cost of $955,936,545 and $796,248,327, respectively)   954,663,668    817,567,355 
Cash and cash equivalents   3,068,165    47,257,801 
Cash and cash equivalents, reserve accounts   9,579,226    5,612,541 
Interest receivable (net of reserve of $1,181,633 and $0, respectively)   5,019,691    5,093,561 
Due from affiliate (See Note 7)   17,670    90,968 
Management fee receivable   363,552    362,549 
Other assets   255,445    254,980 
Current Tax Receivable   64,638    - 
Total assets  $973,032,055   $876,239,755 
           
LIABILITIES          
Revolving credit facility  $25,000,000   $12,500,000 
Deferred debt financing costs, revolving credit facility   (960,415)   (1,191,115)
SBA debentures payable   233,660,000    185,000,000 
Deferred debt financing costs, SBA debentures payable   (5,259,305)   (4,344,983)
7.25% Notes Payable 2025   -    43,125,000 
Deferred debt financing costs, 7.25% notes payable 2025   -    (1,078,201)
7.75% Notes Payable 2025   5,000,000    5,000,000 
Deferred debt financing costs, 7.75% notes payable 2025   (156,726)   (184,375)
4.375% Notes Payable 2026   175,000,000    175,000,000 
Premium on 4.375% notes payable 2026   979,272    1,086,013 
Deferred debt financing costs, 4.375% notes payable 2026   (2,970,717)   (3,395,435)
4.35% Notes Payable 2027   75,000,000    75,000,000 
Discount on 4.35% notes payable 2027   (441,527)   (499,263)
Deferred debt financing costs, 4.35% notes payable 2027   (1,549,296)   (1,722,908)
6.25% Notes Payable 2027   15,000,000    15,000,000 
Deferred debt financing costs, 6.25% notes payable 2027   (380,308)   (416,253)
6.00% Notes Payable 2027   105,500,000    - 
Discount on 6.00% notes payable 2027   (174,486)   - 
Deferred debt financing costs, 6.00% notes payable 2027   (3,227,625)   - 
Base management and incentive fees payable   9,529,363    12,947,025 
Deferred tax liability   1,710,315    1,249,015 
Accounts payable and accrued expenses   1,188,574    799,058 
Current income tax payable   -    2,820,036 
Interest and debt fees payable   3,073,477    2,801,621 
Directors fees payable   108,932    70,000 
Due to manager   189,252    263,814 
Excise tax payable   -    630,183 
Total liabilities   635,818,780    520,459,232 
           
Commitments and contingencies (See Note 9)   
 
    
 
 
           
NET ASSETS          
Common stock, par value $0.001, 100,000,000 common shares authorized, 11,927,238 and 12,131,350 common shares issued and outstanding, respectively   11,927    12,131 
Capital in excess of par value   322,832,986    328,062,246 
Total distributable earnings (deficit)   14,368,362    27,706,146 
Total net assets   337,213,275    355,780,523 
Total liabilities and net assets  $973,032,055   $876,239,755 
NET ASSET VALUE PER SHARE  $28.27   $29.33 

  

See accompanying notes to consolidated financial statements.

1

 

 

Saratoga Investment Corp.

Consolidated Statements of Operations

(unaudited)

 

   For the three months ended   For the six months ended 
   August 31,
2022
  

August 31,

2021

  

August 31,

2022

  

August 31,

2021

 
INVESTMENT INCOME                
Interest from investments                
Interest income:                
Non-control/Non-affiliate investments  $16,197,470   $11,298,024   $30,048,616   $22,534,761 
Affiliate investments   1,322,501    936,508    2,372,649    1,277,020 
Control investments   1,513,666    2,059,101    3,059,796    3,914,086 
Payment-in-kind interest income:                    
Non-control/Non-affiliate investments   85,746    710,329    171,427    887,095 
Affiliate investments   29,167    
-
    29,167    
-
 
Control investments   84,220    109,971    157,441    187,646 
Total interest from investments   19,232,770    15,113,933    35,839,096    28,800,608 
Interest from cash and cash equivalents   34,435    1,071    35,152    1,593 
Management fee income   817,024    814,622    1,632,988    1,632,854 
Dividend Income*   212,688    658,881    512,817    1,057,498 
Structuring and advisory fee income   1,408,086    1,038,250    2,259,814    2,340,125 
Other income*   147,843    814,926    252,111    1,424,995 
Total investment income   21,852,846    18,441,683    40,531,978    35,257,673 
                     
OPERATING EXPENSES                    
Interest and debt financing expenses   7,922,025    5,184,184    14,793,538    9,525,096 
Base management fees   4,104,105    3,002,097    7,906,168    5,761,005 
Incentive management fees expense (benefit)   589,840    2,018,163    (1,314,145)   7,280,699 
Professional fees   368,165    460,753    785,490    967,814 
Administrator expenses   772,917    712,500    1,522,917    1,406,250 
Insurance   90,226    86,318    177,536    172,636 
Directors fees and expenses   110,000    100,500    220,000    192,500 
General and administrative   299,445    453,225    966,861    943,876 
Income tax expense (benefit)   (101,891)   30,682    (200,623)   58,601 
Total operating expenses   14,154,832    12,048,422    24,857,742    26,308,477 
NET INVESTMENT INCOME   7,698,014    6,393,261    15,674,236    8,949,196 
                     
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS                    
Net realized gain (loss) from investments:                    
Non-control/Non-affiliate investments   7,943,838    1,641,462    8,106,347    3,551,605 
Control investments   -    (139,867)   -    (139,867)
Net realized gain (loss) from investments   7,943,838    1,501,595    8,106,347    3,411,738 
Income tax (provision) benefit from realized gain on investments   
-
    (448,883)   69,250    (448,883)
Net change in unrealized appreciation (depreciation) on investments:                    
Non-control/Non-affiliate investments   (13,878,470)   2,256,932    (14,512,759)   8,772,357 
Affiliate investments   2,600,434    2,681,640    3,168,040    4,677,451 
Control investments   (1,980,420)   (1,562,033)   (11,247,186)   6,739,309 
Net change in unrealized appreciation (depreciation) on investments   (13,258,456)   3,376,539    (22,591,905)   20,189,117 
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   (230,154)   (1,328,711)   (592,105)   (1,558,855)
Net realized and unrealized gain (loss) on investments   (5,544,772)   3,100,540    (15,008,413)   21,593,117 
Realized losses on extinguishment of debt   (1,204,809)   (1,552,140)   (1,204,809)   (1,552,140)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $948,433   $7,941,661   $(538,986)  $28,990,173 
                     
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
  $0.08   $0.71   $(0.04)  $2.59 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED
   11,963,276    11,175,436    12,037,855    11,172,787 

 

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

 

See accompanying notes to consolidated financial statements.

 

2

 

 

Saratoga Investment Corp.

Consolidated Statements of Changes in Net Assets

(unaudited)

 

   For the six months ended 
   August 31,
2022
  

August 31,

2021

 
INCREASE (DECREASE) FROM OPERATIONS:        
Net investment income  $15,674,236   $8,949,196 
Net realized gain from investments   8,106,347    3,411,738 
Realized losses on extinguishment of debt   (1,204,809)   (1,552,140)
Income tax (provision) benefit from realized gain on investments   69,250    (448,883)
Net change in unrealized appreciation (depreciation) on investments   (22,591,905)   20,189,117 
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   (592,105)   (1,558,855)
Net increase (decrease) in net assets resulting from operations   (538,986)   28,990,173 
           
DECREASE FROM SHAREHOLDER DISTRIBUTIONS:          
Total distributions to shareholders   (12,798,798)   (9,709,800)
Net decrease in net assets from shareholder distributions   (12,798,798)   (9,709,800)
           
CAPITAL SHARE TRANSACTIONS:          
Proceeds from issuance of common stock   
-
    157,040 
Stock dividend distribution   2,196,868    1,742,614 
Repurchases of common stock   (7,420,421)   (1,252,143)
Repurchase fees   (5,911)   (992)
Offering costs   
-
    (817)
Net increase (decrease) in net assets from capital share transactions   (5,229,464)   645,702 
Total increase (decrease) in net assets   (18,567,248)   19,926,075 
Net assets at beginning of period   355,780,523    304,185,770 
Net assets at end of period  $337,213,275   $324,111,845 

 

See accompanying notes to consolidated financial statements.

 

3

 

 

Saratoga Investment Corp.

Consolidated Statements of Cash Flows

(unaudited)

 

   For the six months ended 
   August 31,
2022
   August 31,
2021
 
Operating activities        
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $(538,986)  $28,990,173 
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   1,594,054    (1,905,423)
Net accretion of discount on investments   (833,939)   (884,936)
Amortization of deferred debt financing costs   1,674,315    1,023,062 
Realized losses on extinguishment of debt   1,204,809    1,552,140 
Income tax expense (benefit)   (269,873)   30,964 
Net realized (gain) loss from investments   (8,106,347)   (3,411,738)
Net change in unrealized (appreciation) depreciation on investments   22,591,905    (20,189,117)
Net change in provision for deferred taxes on unrealized appreciation (depreciation) on investments   592,105    1,558,855 
Proceeds from sales and repayments of investments   105,173,099    149,787,188 
Purchases of investments   (257,515,083)   (235,180,617)
(Increase) decrease in operating assets:          
Interest receivable   73,870    (891,097)
Due from affiliate   73,298    2,719,000 
Management and incentive fee receivable   (1,003)   (329,730)
Tax receivable   64,638    
-
 
Other assets   (465)   (60,140)
Increase (decrease) in operating liabilities:          
Base management and incentive fees payable   (3,417,662)   4,868,310 
Accounts payable and accrued expenses   389,516    1,010,580 
Current tax payable   (2,820,036)   
-
 
Interest and debt fees payable   271,856    (177,519)
Directors fees payable   38,932    (70,500)
Excise tax payable   (630,183)   (691,672)
Due to manager   (74,562)   29,675 
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES   (140,465,742)   (72,222,542)
           
Financing activities          
Borrowings on debt   79,500,000    87,500,000 
Paydowns on debt   (18,340,000)   (73,500,000)
Issuance of notes   105,500,000    175,000,000 
Repayments of notes   (43,125,000)   (60,000,000)
Payments of deferred debt financing costs   (5,087,947)   (5,569,027)
Discount on  debt issuance, 6.000% notes 2027   (176,000)   
-
 
Premium on  debt issuance, 4.375% notes 2026   
-
    1,250,000 
Proceeds from issuance of common stock   
-
    157,040 
Payments of cash dividends   (10,601,930)   (7,967,186)
Repurchases of common stock   (7,420,421)   (1,252,143)
Repurchases fees   (5,911)   (992)
Payments of offering costs   
-
    (817)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES   100,242,791    115,616,875 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS   (40,222,951)   43,394,333 
CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, BEGINNING OF PERIOD   52,870,342    29,915,074 
CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, END OF PERIOD  $12,647,391   $73,309,407 
           
Supplemental information:          
Interest paid during the period  $12,691,530   $8,679,552 
Cash paid for taxes   2,759,376    703,158 
Supplemental non-cash information:          
Payment-in-kind interest income and other adjustments to cost   (1,799,723)   1,905,423 
Net accretion of discount on investments   833,939    884,936 
Amortization of deferred debt financing costs   1,674,315    1,023,062 
Stock dividend distribution   2,196,868    1,742,614 

 

See accompanying notes to consolidated financial statements.

4

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

August 31, 2022

(unaudited)

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair
Value (c)
   % of
Net Assets
 
Non-control/Non-affiliate investments - 228.1% (b)                         
Altvia MidCo, LLC.  Alternative Investment Management Software  First Lien Term Loan
(3M USD TERM SOFR+8.50%), 10.28% Cash, 7/18/2027
  7/18/2022  $8,000,000   $7,921,109   $7,920,000    2.3%
Altvia MidCo, LLC. (h)  Alternative Investment Management Software  Series A-1 Preferred Shares  7/18/2022   2,000,000    2,000,000    2,000,000    0.6%
      Total Alternative Investment Management Software           9,921,109    9,920,000    2.9%
Targus Holdings, Inc. (h)  Consumer Products  Common Stock  12/31/2009   210,456    1,589,630    921,256    0.3%
      Total Consumer Products           1,589,630    921,256    0.3%
Schoox, Inc. (h), (i)  Corporate Education Software  Series 1 Membership Interest  12/8/2020   1,050    475,698    3,652,653    1.1%
      Total Corporate Education Software           475,698    3,652,653    1.1%
GreyHeller LLC (h)  Cyber Security  Common Stock  11/10/2021   7,857,689    1,906,275    2,418,060    0.7%
      Total Cyber Security           1,906,275    2,418,060    0.7%
New England Dental Partners  Dental Practice Management  First Lien Term Loan
(3M USD LIBOR+8.00%), 11.08% Cash, 11/25/2025
  11/25/2020  $6,555,000    6,509,311    6,495,350    1.9%
New England Dental Partners (j)  Dental Practice Management  Delayed Draw Term Loan
(3M USD LIBOR+8.00%), 11.08% Cash, 11/25/2025
  11/25/2020  $2,150,000    2,134,838    2,130,435    0.6%
      Total Dental Practice Management           8,644,149    8,625,785    2.5%
Exigo, LLC  Direct Selling Software  First Lien Term Loan
(1M USD LIBOR+5.75%), 8.31% Cash, 3/16/2027
  3/16/2022  $24,937,500    24,737,201    24,688,125    7.3%
Exigo, LLC (j)  Direct Selling Software  Delayed Draw Term Loan
(1M USD LIBOR+5.75%), 8.31% Cash, 3/16/2027
  3/16/2022  $-    -    -    0.0%
Exigo, LLC (j)  Direct Selling Software  Revolving Credit Facility
(1M USD LIBOR+5.75%), 8.31% Cash, 3/16/2027
  3/16/2022  $208,334    208,333    206,250    0.1%
Exigo, LLC (h), (i)  Direct Selling Software  Common Units  3/16/2022   1,041,667    1,041,667    1,041,667    0.3%
      Total Direct Selling Software           25,987,201    25,936,042    7.7%
C2 Educational Systems  Education Services  First Lien Term Loan
(3M USD LIBOR+8.50%), 11.58% Cash, 5/31/2023
  5/31/2017  $18,500,000    18,489,014    18,524,050    5.5%
C2 Education Systems, Inc. (h)  Education Services  Series A-1 Preferred Stock  5/18/2021   3,127    499,904    636,732    0.2%
Zollege PBC  Education Services  First Lien Term Loan
(3M USD LIBOR+5.50%), 8.58% Cash, 5/11/2026
  5/11/2021  $16,000,000    15,888,280    14,675,200    4.4%
Zollege PBC (j)  Education Services  Delayed Draw Term Loan
(3M USD LIBOR+5.50%), 8.58% Cash, 5/11/2026
  5/11/2021  $500,000    496,314    375,800    0.1%
Zollege PBC (h)  Education Services  Class A Units  5/11/2021   250,000    250,000    160,160    0.0%
      Total Education Services           35,623,512    34,371,942    10.2%
Destiny Solutions Inc. (h), (i)  Education Software  Limited Partner Interests  5/16/2018   3,068    3,969,291    7,773,428    2.3%
GoReact  Education Software  First Lien Term Loan
(3M USD LIBOR+7.50%), 10.58% Cash, 1/17/2025
  1/17/2020  $8,000,000    7,932,329    7,832,000    2.3%

 

5

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair
Value (c)
   % of
Net Assets
 
GoReact (j)  Education Software  Delayed Draw Term Loan
(3M USD LIBOR+7.50%), 10.58% Cash, 1/17/2025
  1/18/2022  $2,000,000    2,000,000    1,947,500    0.6%
Identity Automation Systems (d)  Education Software  First Lien Term Loan
(3M USD LIBOR+9.24%), 12.32% Cash, 5/8/2024
  8/25/2014  $16,722,500    16,722,500    16,449,923    4.9%
Identity Automation Systems (h)  Education Software  Common Stock Class A-2 Units  8/25/2014   232,616    232,616    320,090    0.1%
Identity Automation Systems (h)  Education Software  Common Stock Class A-1 Units  3/6/2020   43,715    171,571    208,993    0.1%
Ready Education  Education Software  First Lien Term Loan
(3M USD TERM SOFR+6.00%), 8.00% Cash, 8/5/2027
  8/5/2022  $27,000,000    26,731,232    26,730,000    7.9%
      Total Education Software           57,759,539    61,261,934    18.2%
TG Pressure Washing Holdings, LLC (h)  Facilities Maintenance  Preferred Equity  8/12/2019   488,148    488,148    617,415    0.2%
      Total Facilities Maintenance           488,148    617,415    0.2%
Davisware, LLC  Field Service Management  First Lien Term Loan
(3M USD LIBOR+7.00%), 10.08% Cash, 7/31/2024
  9/6/2019  $6,000,000    5,963,845    5,923,200    1.8%
Davisware, LLC (j)  Field Service Management  Delayed Draw Term Loan
(3M USD LIBOR+7.00%), 10.08% Cash, 7/31/2024
  9/6/2019  $977,790    975,981    965,274    0.3%
      Total Field Service Management           6,939,826    6,888,474    2.1%
GDS Software Holdings, LLC  Financial Services  First Lien Term Loan
(3M USD LIBOR+7.00%), 10.08% Cash, 12/30/2026
  12/30/2021  $22,713,926    22,588,227    22,232,391    6.6%
GDS Software Holdings, LLC (j)  Financial Services  Delayed Draw Term loan
(3M USD LIBOR+7.00%), 10.08% Cash, 12/30/2026
  12/30/2021  $2,250,000    2,229,203    2,180,335    0.6%
GDS Software Holdings, LLC  (h)  Financial Services  Common Stock Class A Units  8/23/2018   250,000    250,000    493,097    0.1%
      Total Financial Services           25,067,430    24,905,823    7.3%
Ascend Software, LLC  Financial Services Software  First Lien Term Loan
(3M USD LIBOR+7.50%), 10.58% Cash, 12/15/2026
  12/15/2021  $6,000,000    5,946,906    5,875,200    1.7%
Ascend Software, LLC (j)  Financial Services Software  Delayed Draw Term Loan
(3M USD LIBOR+7.50%), 10.58% Cash, 12/15/2026
  12/15/2021  $2,300,000    2,277,882    2,164,800    0.6%
      Total Financial Services Software           8,224,788    8,040,000    2.3%
Ohio Medical, LLC (h)  Healthcare Products Manufacturing  Common Stock  1/15/2016   5,000    380,353    584,570    0.2%
      Total Healthcare Products Manufacturing           380,353    584,570    0.2%
Axiom Parent Holdings, LLC (h)  Healthcare Services  Common Stock Class A Units  6/19/2018  $400,000    400,000    1,168,701    0.3%
ComForCare Health Care (d)  Healthcare Services  First Lien Term Loan
(3M USD LIBOR+6.25%), 9.33% Cash, 1/31/2025
  1/31/2017  $25,000,000    24,913,338    25,000,000    7.4%
      Total Healthcare Services           25,313,338    26,168,701    7.7%
TRC HemaTerra, LLC (h)  Healthcare Software  Class D Membership Interests  4/15/2019   2,487    2,816,693    4,085,490    1.2%
HemaTerra Holding Company, LLC (d)  Healthcare Software  First Lien Term Loan
(3M USD LIBOR+8.25%), 11.33% Cash, 1/31/2026
  4/15/2019  $35,820,000    35,558,270    35,447,472    10.5%
HemaTerra Holding Company, LLC (d)  Healthcare Software  Delayed Draw Term Loan
(3M USD LIBOR+8.25%), 11.33% Cash, 1/31/2026
  4/15/2019  $13,930,000    13,851,039    13,785,128    4.1%

 

6

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair
Value (c)
   % of
Net Assets
 
Procurement Partners, LLC  Healthcare Software  First Lien Term Loan
(3M USD LIBOR+5.50%), 8.58% Cash, 11/12/2025
  11/12/2020  $35,125,000    34,860,737    34,274,975    10.2%
Procurement Partners, LLC  Healthcare Software  Delayed Draw Term Loan
(3M USD LIBOR+5.50%), 8.58% Cash, 11/12/2025
  11/12/2020  $4,300,000    4,259,432    4,195,940    1.2%
Procurement Partners Holdings LLC (h)  Healthcare Software  Class A Units  11/12/2020   550,986    550,986    677,936    0.2%
      Total Healthcare Software           91,897,157    92,466,941    27.4%
Roscoe Medical, Inc. (h)  Healthcare Supply  Common Stock  3/26/2014   5,081    508,077    -    0.0%
      Total Healthcare Supply           508,077    -    0.0%
Book4Time, Inc. (a), (d)  Hospitality/Hotel  First Lien Term Loan
(3M USD LIBOR+7.50%), 10.58%, 12/22/2025
  12/22/2020  $3,136,517    3,114,306    3,136,517    0.9%
Book4Time, Inc. (a)  Hospitality/Hotel  Delayed Draw Term Loan
(3M USD LIBOR+7.50%), 10.58%, 12/22/2025
  12/22/2020  $2,000,000    1,981,430    2,000,000    0.6%
Book4Time, Inc. (a), (h), (i)  Hospitality/Hotel  Class A Preferred Shares  12/22/2020   200,000    156,826    235,040    0.1%
Knowland Group, LLC (h), (k)  Hospitality/Hotel  Second Lien Term Loan
(3M USD LIBOR+8.00%), 12.08% Cash/1.00% PIK, 5/9/2024
  11/9/2018  $15,878,989    15,878,989    9,711,590    2.9%
Sceptre Hospitality Resources, LLC  Hospitality/Hotel  First Lien Term Loan
(3M USD LIBOR+8.00%), 11.08% Cash, 9/2/2026
  4/27/2020  $6,000,000    5,955,263    6,000,000    1.8%
Sceptre Hospitality Resources, LLC (j)  Hospitality/Hotel  Delayed Draw Term Loan
(3M USD LIBOR+8.00%), 11.08% Cash, 9/2/2026
  9/2/2021  $750,000    742,967    750,000    0.2%
      Total Hospitality/Hotel           27,829,781    21,833,147    6.5%
Granite Comfort, LP (d)  HVAC Services and Sales  First Lien Term Loan
(3M USD LIBOR+7.00%), 10.08% Cash, 11/16/2025
  11/16/2020  $63,000,000    62,445,879    62,710,200    18.6%
Granite Comfort, LP (d), (j)  HVAC Services and Sales  Delayed Draw Term Loan
(3M USD LIBOR+7.00%), 10.08% Cash, 11/16/2025
  11/16/2020  $2,000,000    1,982,656    1,990,800    0.6%
      Total HVAC Services and Sales           64,428,535    64,701,000    19.2%
Vector Controls Holding Co., LLC (d)  Industrial Products  First Lien Term Loan
(3M USD LIBOR+6.50%), 9.58% Cash, 3/6/2025
  3/6/2013  $4,186,686    4,186,686    4,186,686    1.2%
Vector Controls Holding Co., LLC (h)  Industrial Products  Warrants to Purchase Limited Liability Company Interests, Expires 11/30/2027  5/31/2015   343    -    4,076,544    1.2%
      Total Industrial Products           4,186,686    8,263,230    2.4%
AgencyBloc, LLC  Insurance Software  First Lien Term Loan
(3M USD BSBY+8.00%), 9.00% Cash, 10/1/2026
  10/1/2021  $12,272,727    12,176,256    12,189,272    3.6%
Panther ParentCo LLC (h)  Insurance Software  Class A Units  10/1/2021   2,225,000    2,225,000    2,718,154    0.8%
      Total Insurance Software           14,401,256    14,907,426    4.4%
LogicMonitor, Inc. (d)  IT Services  First Lien Term Loan
(3M USD LIBOR+5.00), 8.08% Cash, 5/17/2023
  3/20/2020  $43,000,000    42,885,490    43,000,000    12.8%
      Total IT Services           42,885,490    43,000,000    12.8%
ActiveProspect, Inc. (j)  Lead Management Software  First Lien Term Loan
(3M USD LIBOR+6.00%), 9.08% Cash, 8/8/2027
  8/8/2022  $-    -    -    0.0%
ActiveProspect, Inc.  Lead Management Software  Delayed Draw Term Loan
(3M USD LIBOR+6.00%), 9.08% Cash, 8/8/2027
  8/8/2022  $12,000,000    11,895,886    11,895,600    3.5%
      Total Lead Management Software           11,895,886    11,895,600    3.5%

 

7

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair
Value (c)
   % of
Net Assets
 
Centerbase, LLC  Legal Software  First Lien Term Loan
(1M USD TERM SOFR+7.75%), 10.03% Cash, 1/18/2027
  1/18/2022  $21,354,480    21,141,001    20,929,526    6.2%
      Total Legal Software           21,141,001    20,929,526    6.2%
Madison Logic, Inc. (d)  Marketing Orchestration Software  First Lien Term Loan
(1M USD LIBOR+5.50%), 8.06% Cash, 11/22/2026
  12/10/2021  $28,771,084    28,654,535    28,543,793    8.5%
Madison Logic, Inc. (j)  Marketing Orchestration Software  Revolving Credit Facility
(1M USD LIBOR+5.50%), 8.06% Cash, 11/22/2026
  12/10/2021  $-    -    -    0.0%
      Total Marketing Orchestration Software           28,654,535    28,543,793    8.5%
inMotionNow, Inc.  Marketing Services  First Lien Term Loan
(3M USD LIBOR+7.50), 10.58% Cash, 5/15/2024
  5/15/2019  $12,200,000    12,153,315    12,200,000    3.6%
inMotionNow, Inc. (d)  Marketing Services  Delayed Draw Term Loan
(3M USD LIBOR+7.50)  10.58% Cash, 5/15/2024
  5/15/2019  $5,000,000    4,979,105    5,000,000    1.5%
      Total Marketing Services           17,132,420    17,200,000    5.1%
ARC Health OpCo LLC (d)  Mental Healthcare Services  First Lien Term Loan
(3M USD TERM SOFR+8.50%), 10.50% Cash, 8/5/2027
  8/5/2022  $6,500,000    6,419,746    6,418,750    1.9%
ARC Health OpCo LLC (d), (j)  Mental Healthcare Services  Delayed Draw Term Loan (3M USD TERM SOFR+8.50%), 10.50% Cash, 8/5/2027  8/5/2022  $-    -    -    0.0%
ARC Health OpCo LLC (h)  Mental Healthcare Services  Class A Preferred Shares  8/5/2022   1,851,852    2,000,000    2,000,000    0.6%
      Total Mental Healthcare Services           8,419,746    8,418,750    2.5%
Chronus LLC  Mentoring Software  First Lien Term Loan
(3M USD LIBOR+5.25),8.33% Cash, 8/26/2026
  8/26/2021  $15,000,000    14,875,946    14,617,500    4.3%
Chronus LLC  Mentoring Software  First Lien Term Loan
(3M USD LIBOR+6.00),9.08% Cash, 8/26/2026
  8/26/2021  $3,000,000    2,970,276    2,923,500    0.9%
Chronus LLC (h)  Mentoring Software  Series A Preferred Stock  8/26/2021   3,000    3,000,000    3,396,063    1.0%
      Total Mentoring Software           20,846,222    20,937,063    6.2%
Omatic Software, LLC  Non-profit Services  First Lien Term Loan
(3M USD LIBOR+8.00%), 12.08% Cash/1.00% PIK, 5/29/2023
  5/29/2018  $10,061,959    10,027,320    9,999,575    3.0%
      Total Non-profit Services           10,027,320    9,999,575    3.0%
Emily Street Enterprises, L.L.C.  Office Supplies  Senior Secured Note
(3M USD LIBOR+8.50%), 11.58% Cash, 12/31/2023
  12/28/2012  $3,300,000    3,300,000    3,237,960    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    390,161    0.1%
      Total Office Supplies           3,700,000    3,628,121    1.1%
Apex Holdings Software Technologies, LLC  Payroll Services  First Lien Term Loan
(3M USD LIBOR+8.00%), 11.08% Cash, 9/21/2024
  9/21/2016  $15,500,000    15,493,083    15,422,500    4.6%
      Total Payroll Services           15,493,083    15,422,500    4.6%
Buildout, Inc.  Real Estate Services  First Lien Term Loan
(3M USD LIBOR+7.00%), 10.08% Cash, 7/9/2025
  7/9/2020  $14,000,000    13,908,526    13,827,800    4.1%
Buildout, Inc.  Real Estate Services  Delayed Draw Term Loan
(3M USD LIBOR+7.00%), 10.08% Cash, 7/9/2025
  2/12/2021  $38,500,000    38,207,942    38,026,450    11.3%
Buildout, Inc. (h), (i)  Real Estate Services  Limited Partner Interests  7/9/2020   1,160    1,205,308    1,250,659    0.4%
      Total Real Estate Services           53,321,776    53,104,909    15.8%

 

8

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair
Value (c)
   % of
Net Assets
 
Archimeds Parent LLC (h)  Research Software  Class A Common Units  6/27/2022   1,000,000    1,000,000    1,000,000    0.3%
Wellspring Worldwide Inc.  Research Software  First Lien Term Loan
(3M USD BSBY+7.25%), 8.25% Cash, 6/27/2027
  6/27/2022  $9,600,000    9,495,082    9,493,440    2.8%
      Total Research Software           10,495,082    10,493,440    0 
LFR Chicken LLC  Restaurant  First Lien Term Loan
(1M USD LIBOR+7.00%), 9.56% Cash, 11/19/2026
  11/19/2021  $12,000,000    11,896,714    11,854,800    3.5%
LFR Chicken LLC (j)  Restaurant  Delayed Draw Term Loan
(1M USD LIBOR+7.00%), 9.56% Cash, 11/19/2026
  11/19/2021  $9,000,000    8,917,647    8,891,100    2.6%
LFR Chicken LLC (h)  Restaurant  Series B Preferred Units  11/19/2021   497,183    1,000,000    1,293,887    0.4%
TMAC Acquisition Co., LLC  Restaurant  Unsecured Term Loan 8.00% PIK, 9/01/2023  3/1/2018  $2,979,312    2,979,312    2,768,516    0.8%
      Total Restaurant           24,793,673    24,808,303    7.3%
Pepper Palace, Inc. (d)  Specialty Food Retailer  First Lien Term Loan
(3M USD LIBOR+6.25%), 9.33% Cash, 6/30/2026
  6/30/2021  $33,660,000    33,382,690    26,991,954    8.0%
Pepper Palace, Inc. (j)  Specialty Food Retailer  Delayed Draw Term Loan
(3M USD LIBOR+6.25%), 9.33% Cash, 6/30/2026
  6/30/2021  $-    -    -    0.0%
Pepper Palace, Inc. (j)  Specialty Food Retailer  Revolving Credit Facility
(3M USD LIBOR+6.25%), 9.33% Cash, 6/30/2026
  6/30/2021  $-    -    -    0.0%
Pepper Palace, Inc. (h)  Specialty Food Retailer  Membership Interest  6/30/2021   1,000,000    1,000,000    -    0.0%
      Total Specialty Food Retailer           34,382,690    26,991,954    8.0%
ArbiterSports, LLC (d)  Sports Management  First Lien Term Loan
(3M USD LIBOR+6.50%), 9.58% Cash, 2/21/2025
  2/21/2020  $26,000,000    25,872,154    25,565,800    7.6%
ArbiterSports, LLC (d)  Sports Management  Delayed Draw Term Loan
(3M USD LIBOR+6.50%), 9.58% Cash, 2/21/2025
  2/21/2020  $1,000,000    1,000,000    983,300    0.3%
      Total Sports Management           26,872,154    26,549,100    7.9%
Avionte Holdings, LLC (h)  Staffing Services  Class A Units  1/8/2014   100,000    100,000    2,061,008    0.6%
      Total Staffing Services           100,000    2,061,008    0.6%
JDXpert  Talent Acquisition Software  First Lien Term Loan
(3M USD LIBOR+8.50%), 11.58% Cash, 5/2/2027
  5/2/2022  $6,000,000    5,941,228    5,940,000      
JDXpert (j)  Talent Acquisition Software  Delayed Draw Term Loan
(3M USD LIBOR+8.50%), 11.58% Cash, 5/2/2027
  5/2/2022  $-    -    -      
Jobvite, Inc. (d)  Talent Acquisition Software  First Lien Term Loan
(3M USD TERM SOFR+8.00%), 9.68% Cash, 8/5/2028
  8/5/2022  $20,000,000    19,852,534    20,000,000    5.9%
      Total Talent Acquisition Software           25,793,762    25,940,000    5.9%
National Waste Partners (d)  Waste Services  Second Lien Term Loan 10.00% Cash, 11/13/2022  2/13/2017  $9,000,000    9,000,000    9,000,000    2.7%
      Total Waste Services           9,000,000    9,000,000    2.7%
Sub Total Non-control/Non-affiliate investments                 776,527,328    775,408,041    228.1%

 

9

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair
Value (c)
   % of
Net Assets
 
Affiliate investments - 20.9% (b)                         
Artemis Wax Corp. (d), (f)  Consumer Services  Delayed Draw Term Loan
(1M USD LIBOR+9.00%), 11.56% Cash, 5/20/2026
  5/20/2021  $30,000,000    29,748,215    29,925,000    8.9%
Artemis Wax Corp. (f), (j)  Consumer Services  Delayed Draw Term Loan
(1M USD LIBOR+6.50%), 9.06% Cash, 5/20/2026
  5/19/2022  $18,000,000    17,822,955    17,955,000    5.3%
Artemis Wax Corp. (f), (h)  Consumer Services  Series B-1 Preferred Stock  5/20/2021   934,463    1,500,000    4,825,352    1.4%
Artemis Wax Corp. (f), (h)  Consumer Services  Series C Preferred Stock  5/20/2021   5,951    5,951,492    5,951,488    1.8%
      Total Consumer Services           55,022,662    58,656,840    17.4%
ETU Holdings, Inc. (f)  Corporate Education Software  First Lien Term Loan
(3M USD LIBOR+9.00%), 12.08% Cash, 8/18/2027
  8/18/2022  $7,000,000    6,930,251    6,930,000    2.1%
ETU Holdings, Inc. (f)  Corporate Education Software  Second Lien Term Loan 15.00% PIK, 2/18/2028  8/18/2022  $5,000,000    4,950,012    4,950,000    1.5%
ETU Holdings, Inc. (f),(h)  Corporate Education Software  Series A-1 Preferred Stock  8/18/2022   3,000,000    3,000,000    3,000,000    0.9%
      Total Corporate Education Software           14,880,263    14,880,000    4.5%
Axero Holdings, LLC (f)  Employee Collaboration Software  First Lien Term Loan
(3M USD LIBOR+10.00%), 13.08% Cash, 6/30/2026
  6/30/2021  $5,500,000    5,453,695    5,508,800    1.6%
Axero Holdings, LLC (f)  Employee Collaboration Software  Delayed Draw Term Loan
(3M USD LIBOR+10.00%), 13.08% Cash, 6/30/2026
  6/30/2021  $1,100,000    1,089,347    1,101,760    0.3%
Axero Holdings, LLC (f), (j)  Employee Collaboration Software  Revolving Credit Facility
(3M USD LIBOR+10.00%), 13.08% Cash, 6/30/2026
  2/3/2022  $-    -    -    0.0%
Axero Holdings, LLC (f), (h)  Employee Collaboration Software  Series A Preferred Units  6/30/2021   2,000,000    2,000,000    2,350,000    0.7%
Axero Holdings, LLC (f), (h)  Employee Collaboration Software  Series B Preferred Units  6/30/2021   2,000,000    2,000,000    3,125,804    0.9%
      Total Employee Collaboration Software           10,543,042    12,086,364    3.5%
Sub Total Affiliate investments                 80,445,967    85,623,204    20.9%
Control investments - 27.7% (b)                             
Netreo Holdings, LLC (g)  IT Services  First Lien Term Loan
(3M USD LIBOR +6.50%), 11.08% Cash/1.50% PIK 12/31/2025
  7/3/2018  $5,487,916    5,466,713    5,434,135    1.6%
Netreo Holdings, LLC (d), (g)  IT Services  Delayed Draw Term Loan
(3M USD LIBOR +6.50%), 11.08% Cash/1.50% PIK, 12/31/2025
  5/26/2020  $17,582,671    17,518,802    17,410,361    5.2%
Netreo Holdings, LLC (g), (h)  IT Services  Common Stock Class A Unit  7/3/2018   4,600,677    8,344,500    17,661,450    5.2%
      Total IT Services           31,330,015    40,505,946    12.0%
Saratoga Investment Corp. CLO 2013-1, Ltd. (a), (e), (g)  Structured Finance Securities  Other/Structured Finance Securities 5.50%, 4/20/2033  1/22/2008  $111,000,000    30,113,859    23,397,375    6.9%
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-2-R-3 Note (a), (g)  Structured Finance Securities  Other/Structured Finance Securities
(3M USD LIBOR+10.00%), 13.08%, 4/20/2033
  8/9/2021  $9,375,000    9,375,000    8,929,954    2.6%
      Total Structured Finance Securities           39,488,859    32,327,329    9.5%
Saratoga Senior Loan Fund I JV, LLC (a), (g), (j)  Investment Fund  Unsecured Loan 10.00%, 6/15/2023  2/17/2022  $14,072,188    14,072,188    14,072,188    4.2%
Saratoga Senior Loan Fund I JV, LLC (a), (g)  Investment Fund  Membership Interest  2/17/2022   14,072,188    14,072,188    6,726,960    2.0%
      Total Investment Fund           28,144,376    20,799,148    6.2%
Sub Total Control investments                 98,963,250    93,632,423    27.7%
TOTAL INVESTMENTS - 276.7% (b)                $955,936,545   $954,663,668    276.7%

 

10

 

 

   Number of Shares   Cost   Fair Value   % of
Net Assets
 
Cash and cash equivalents and cash and cash equivalents, reserve accounts - 3.8% (b)                
U.S. Bank Money Market (l)   12,647,391   $12,647,391   $12,647,391    3.8%
Total cash and cash equivalents and cash and cash equivalents, reserve accounts   12,647,391   $12,647,391   $12,647,391    3.8%

 

(1)Securities are exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and are restricted securities.
(a)Represents an investment that is not a “qualifying asset” under Section 55(a) of the Investment Company Act of 1940, as amended (the 1940 Act”). As of August 31, 2022, non-qualifying assets represent 7.4% of the Company’s portfolio at fair value. As a BDC, the Company generally has to invest at least 70% of its total assets in qualifying assets.
(b)Percentages are based on net assets of $337,213,275 as of August 31, 2022.
(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 8 to the consolidated financial statements).
(e)This investment does not have a stated interest rate that is payable thereon. As a result, the 5.50% interest rate in the table above represents the effective interest rate currently earned on the investment cost and is based on the current cash interest and other income generated by the investment.
(f)As defined in the 1940 Act, this portfolio company is an “affiliate” as we own between 5.0% and 25.0% of the outstanding voting securities. Transactions during the six months ended August 31, 2022 in which the issuer was an affiliate are as follows:

 

Company  Purchases   Sales   Total Interest from Investments   Management Fee Income   Net Realized
Gain (Loss) from Investments
   Net Change in Unrealized Appreciation (Depreciation) 
Artemis Wax Corp.  $17,940,000   $
       -
   $1,962,230   $
            -
   $
         -
   $2,173,891 
Axero Holdings, LLC   1,089,000    
-
    377,596    
-
    
-
    994,412 
ETU Holdins, Inc.   14,880,000    
-
    61,989    
-
    
-
    (263)
Total  $33,909,000   $
-
   $2,401,815   $
-
   $
-
   $3,168,040 

 

11

 

 

(g)As defined in the 1940 Act, we “control” this portfolio company because we own more than 25% of the portfolio company’s outstanding voting securities. Transactions during the six months ended August 31, 2022 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  $3,960,000   $
       -
   $1,001,323   $
-
   $
           -
   $(1,467,584)
Saratoga Investment Corp. CLO 2013-1, Ltd.   
-
    
-
    1,003,544    1,632,988    
-
    (3,098,264)
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-2-R-3 Note   
-
    
-
    538,003    
-
    
-
    (445,046)
Saratoga Senior Loan Fund I JV, LLC   947,188    
-
    674,367    
-
    
-
    
-
 
Saratoga Senior Loan Fund I JV, LLC   947,188    
-
    
-
    
-
    
-
    (6,236,292)
Total  $5,854,376   $
-
   $3,217,237   $1,632,988   $
-
   $(11,247,186)

 

(h)Non-income producing at August 31, 2022.
(i)Includes securities issued by an affiliate of the company.
(j)All or a portion of this investment has an unfunded commitment as of August 31, 2022. (See Note 9 to the consolidated financial statements).
(k)As of August 31, 2022, the investment was on non-accrual status. The fair value of these investments was approximately $9.7 million, which represented 1.0% 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 August 31, 2022.

 

BSBY - Bloomberg Short-Term Bank Yield

LIBOR - London Interbank Offered Rate

SOFR - Secured Overnight Financing Rate

 

3M USD BSBY - The 3 month USD BSBY rate as of August 31, 2022 was 2.97%.

1M USD LIBOR - The 1 month USD LIBOR rate as of August 31, 2022 was 2.56%.

3M USD LIBOR - The 3 month USD LIBOR rate as of August 31, 2022 was 3.08%.

1M USD TERM SOFR - The 1 month USD SOFR rate as of August 31, 2022 was 2.28%

3M USD TERM SOFR - The 3 month USD SOFR rate as of August 31, 2022 was 1.68%

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

 

See accompanying notes to consolidated financial statements.

 

12

 

 

Saratoga Investment Corp.

 

Consolidated Schedule of Investments

 

February 28, 2022

 

Company(1)  Industry  Investment Interest Rate/Maturity  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair
Value (c)
   % of
Net Assets
 
Non-control/Non-affiliate investments - 187.4% (b)                   
Targus Holdings, Inc. (h)  Consumer Products  Common Stock  12/31/2009   210,456   $1,589,630   $692,535    0.2%
        Total Consumer Products           1,589,630    692,535    0.2%
Schoox, Inc. (h), (i)  Corporate Education Software  Series 1 Membership Interest  12/8/2020   1,050    475,698    3,305,839    0.9%
        Total Corporate Education Software           475,698    3,305,839    0.9%
GreyHeller LLC (h)  Cyber Security  Common Stock  11/10/2021   6,742,392    1,635,704    1,635,704    0.5%
        Total Cyber Security           1,635,704    1,635,704    0.5%
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    6,502,672    6,404,891    1.8%
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    2,132,639    1,997,715    0.6%
      Total Dental Practice Management           8,635,311    8,402,606    2.4%
PDDS Buyer, LLC (d)  Dental Practice Management Software  First Lien Term Loan
(3M USD LIBOR+5.50%), 6.00% Cash, 7/15/2024
  7/15/2019  $28,000,000    27,943,852    27,938,400    7.9%
PDDS Buyer, LLC (h)  Dental Practice Management Software  Series A-1 Preferred Shares  8/10/2020   1,755,831    2,000,000    7,099,940    2.0%
        Total Dental Practice Management Software           29,943,852    35,038,340    9.9%
C2 Educational Systems  Education Services  First Lien Term Loan
(3M USD LIBOR+8.50%), 10.00% Cash, 5/31/2023
  5/31/2017  $18,500,000    18,484,747    18,220,650    5.1%
C2 Education Systems, Inc. (h)  Education Services  Series A-1 Preferred Stock  5/18/2021   3,127    499,904    599,296    0.2%
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    15,877,908    15,794,300    4.4%
Zollege PBC (j)  Education Services  Delayed Draw Term Loan
(3M USD LIBOR+5.50%), 6.50% Cash, 5/11/2026
  5/11/2021  $500,000    495,811    493,950    0.1%
Zollege PBC (h)  Education Services  Class A Units  5/11/2021   250,000    250,000    201,218    0.1%
        Total Education Services           35,608,370    35,309,414    9.9%
Destiny Solutions Inc. (h), (i)  Education Software  Limited Partner Interests  5/16/2018   3,065    3,969,291    7,632,061    2.1%
Identity Automation Systems (d)  Education Software  First Lien Term Loan
(3M USD LIBOR+9.24%), 10.99% Cash, 5/8/2024
  8/25/2014  $16,941,250    16,941,250    16,941,250    4.8%
Identity Automation Systems (h)  Education Software  Common Stock Class A-2 Units  8/25/2014   232,616    232,616    801,923    0.2%
Identity Automation Systems (h)  Education Software  Common Stock Class A-1 Units  3/6/2020   43,715    171,571    200,820    0.1%
GoReact  Education Software  First Lien Term Loan
(3M USD LIBOR+7.50%), 9.50% Cash, 1/17/2025
  1/17/2020  $8,000,000    7,920,033    8,080,000    2.3%
GoReact (j)  Education Software  Delayed Draw Term Loan
(3M USD LIBOR+7.50%), 9.50% Cash, 1/17/2025
  1/18/2022  $-    -    -    0.0%
      Total Education Software           29,234,761    33,656,054    9.5%
TG Pressure Washing Holdings, LLC (h)  Facilities Maintenance  Preferred Equity  8/12/2019   488,148    488,148    482,036    0.1%
      Total Facilities Maintenance           488,148    482,036    0.1%
Davisware, LLC  Field Service Management  First Lien Term Loan
(3M USD LIBOR+7.00%), 9.00% Cash, 7/31/2024
  9/6/2019  $6,000,000    5,954,705    6,003,000    1.7%
Davisware, LLC (j)  Field Service Management  Delayed Draw Term Loan
(3M USD LIBOR+7.00%), 9.00% Cash, 7/31/2024
  9/6/2019  $977,790    975,504    978,279    0.3%
        Total Field Service Management           6,930,209    6,981,279    2.0%
GDS Software Holdings, LLC  Financial Services  First Lien Term Loan
(3M USD LIBOR+7.00%), 8.00% Cash, 12/30/2026
  12/30/2021  $22,713,926    22,579,864    22,570,829    6.3%
GDS Software Holdings, LLC (j)  Financial Services  Delayed Draw Term loan
(3M USD LIBOR+7.00%), 8.00% Cash, 12/30/2026
  12/18/2021  $500,000    495,031    496,850    0.1%
GDS Software Holdings, LLC (h)  Financial Services  Common Stock Class A Units  8/23/2018   250,000    250,000    472,009    0.1%
        Total Financial Services           23,324,895    23,539,688    6.5%

 

13

 

 

Company(1)  Industry  Investment Interest Rate/Maturity  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair
Value (c)
   % of
Net Assets
 
Ascend Software, LLC  Financial Services Software  First Lien Term Loan
(3M USD LIBOR+7.50%), 8.50% Cash, 12/15/2026
  12/15/2021  $6,000,000    5,942,482    5,940,000    1.7%
Ascend Software, LLC (j)  Financial Services Software  Delayed Draw Term Loan
(3M USD LIBOR+7.50%), 8.50% Cash, 12/15/2026
  12/15/2021  $-    -    -    0.0%
      Total Financial Services Software           5,942,482    5,940,000    1.7%
Ohio Medical, LLC (h)  Healthcare Products Manufacturing  Common Stock  1/15/2016   5,000    380,353    714,271    0.2%
      Total Healthcare Products Manufacturing           380,353    714,271    0.2%
Axiom Parent Holdings, LLC (h)  Healthcare Services  Common Stock Class A Units  6/19/2018   400,000    400,000    1,032,934    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    9,974,217    10,013,000    2.8%
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    5,977,846    6,007,800    1.7%
ComForCare Health Care (d)  Healthcare Services  First Lien Term Loan
(3M USD LIBOR+7.25%), 8.25% Cash, 1/31/2025
  1/31/2017  $25,000,000    24,903,581    25,000,000    7.0%
        Total Healthcare Services           41,255,644    42,053,734    11.8%
TRC HemaTerra, LLC (h)  Healthcare Software  Class D Membership Interests  4/15/2019   2,487    2,816,693    3,788,769    1.1%
HemaTerra Holding Company, LLC (d)  Healthcare Software  First Lien Term Loan
(3M USD LIBOR+8.25%), 9.25% Cash, 1/31/2026
  4/15/2019  $36,000,000    35,715,061    35,640,000    10.0%
HemaTerra Holding Company, LLC (d)  Healthcare Software  Delayed Draw Term Loan
(3M USD LIBOR+8.25%), 9.25% Cash, 1/31/2026
  4/15/2019  $14,000,000    13,912,744    13,860,000    3.9%
Procurement Partners, LLC  Healthcare Software  First Lien Term Loan
(3M USD LIBOR+5.50%), 6.50% Cash, 11/12/2025
  11/12/2020  $35,125,000    34,827,633    34,998,550    9.8%
Procurement Partners, LLC (j)  Healthcare Software  Delayed Draw Term Loan
(3M USD LIBOR+5.50%), 6.50% Cash, 11/12/2025
  11/12/2020  $1,200,000    1,188,047    1,195,680    0.3%
Procurement Partners Holdings LLC (h)  Healthcare Software  Class A Units  11/12/2020   550,986    550,986    643,044    0.2%
      Total Healthcare Software           89,011,164    90,126,043    25.3%
Roscoe Medical, Inc. (h)  Healthcare Supply  Common Stock  3/26/2014   5,081    508,077    52,853    0.0%
Roscoe Medical, Inc.  Healthcare Supply  Second Lien Term Loan
11.25% Cash, 3/31/2022
  3/26/2014  $5,141,413    5,141,413    5,141,413    1.4%
        Total Healthcare Supply           5,649,490    5,194,266    1.4%
Book4Time, Inc. (a), (d)  Hospitality/Hotel  First Lien Term Loan
(3M USD LIBOR+8.50%), 10.25%, 12/22/2025
  12/22/2020  $3,136,517    3,111,278    3,112,052    0.9%
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), (h), (i)  Hospitality/Hotel  Class A Preferred Shares  12/22/2020  $200,000    156,826    198,638    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  $15,878,989    15,878,989    10,592,873    3.0%
Sceptre Hospitality Resources, LLC  Hospitality/Hotel  First Lien Term Loan
(1M USD LIBOR+8.00%), 9.00% Cash, 9/2/2026
  4/27/2020  $6,000,000    5,952,460    6,021,000    1.7%
Sceptre Hospitality Resources, LLC (j)  Hospitality/Hotel  Delayed Draw Term Loan
(1M USD LIBOR+8.00%), 9.00% Cash, 9/2/2026
  9/2/2021  $-    -    -    0.0%
      Total Hospitality/Hotel           25,099,553    19,924,563    5.7%
Granite Comfort, LP  HVAC Services and Sales  First Lien Term Loan
(1M USD LIBOR+8.00%), 9.00% Cash, 11/16/2025
  11/16/2020  $28,000,000    27,764,146    27,977,600    7.9%
Granite Comfort, LP(j)  HVAC Services and Sales  Delayed Draw Term Loan
(1M USD LIBOR+8.00%), 9.00% Cash, 11/16/2025
  11/16/2020  $2,000,000    1,980,805    1,998,400    0.6%
        Total HVAC Services and Sales           29,744,951    29,976,000    8.5%
AgencyBloc, LLC  Insurance Software  First Lien Term Loan
(3M USD BSBY+8.00%), 9.00% Cash, 10/1/2026
  10/1/2021  $9,000,000    8,925,938    8,920,800    2.5%
Panther ParentCo LLC (h)  Insurance Software  Class A Units  10/1/2021   2,000,000    2,000,000    2,000,000    0.6%
      Total Insurance Software           10,925,938    10,920,800    3.1%

 

14

 

 

Company(1)  Industry  Investment Interest Rate/Maturity  Original Acquisition Date  Principal/
Number of Shares
   Cost   Fair
Value (c)
   % of
Net Assets
 
Vector Controls Holding Co., LLC (d)  Industrial Products  First Lien Term Loan
(3M USD LIBOR+6.50%), 8.00% Cash, 3/6/2025
  3/6/2013  $5,008,186    5,008,186    5,008,186