UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

Form 10-Q

 

 

 

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

 

For the Quarterly Period Ended November 30, 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
8.00% Notes due 2027   SAJ   The New York Stock Exchange

8.125% Notes due 2027

 

SAY

 

The New York Stock Exchange

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

The number of outstanding common shares of the registrant as of January 9, 2023 was 11,890,500.

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
PART I. FINANCIAL INFORMATION 1
     
Item 1. Consolidated Financial Statements 1
     
  Consolidated Statements of Assets and Liabilities as of November 30, 2022 (unaudited) and February 28, 2022 1
     
  Consolidated Statements of Operations for the three and nine months ended November 30, 2022 (unaudited) and November 30, 2021 (unaudited) 2
     
  Consolidated Statements of Changes in Net Assets for three and nine months ended November 30, 2022 (unaudited) and November 30, 2021 (unaudited) 3
     
 

Consolidated Statements of Cash Flows for the nine months ended November 30, 2022 (unaudited) and November 30, 2021 (unaudited)

4
     
  Consolidated Schedules of Investments as of November 30, 2022 (unaudited) and February 28, 2022 5
     
  Notes to Consolidated Financial Statements as of November 30, 2022 (unaudited) 26
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 103
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 145
     
Item 4. Controls and Procedures 146
     
PART II. OTHER INFORMATION 147
     
Item 1. Legal Proceedings 147
     
Item 1A. Risk Factors 147
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 147
     
Item 3. Defaults Upon Senior Securities 147
     
Item 4. Mine Safety Disclosures 147
     
Item 5. Other Information 147
     
Item 6. Exhibits 148
     
Signatures 150

 

i

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

Saratoga Investment Corp.

Consolidated Statements of Assets and Liabilities

 

   November 30, 2022   February 28, 2022 
   (unaudited)     
ASSETS        
Investments at fair value        
Non-control/Non-affiliate investments (amortized cost of $776,943,715 and $654,965,044, respectively)  $777,907,062   $668,358,516 
Affiliate investments (amortized cost of $90,180,944 and $46,224,927, respectively)   96,051,664    48,234,124 
Control investments (amortized cost of $119,358,478 and $95,058,356, respectively)   108,075,326    100,974,715 
Total investments at fair value (amortized cost of $986,483,137 and $796,248,327, respectively)   982,034,052    817,567,355 
Cash and cash equivalents   5,672,012    47,257,801 
Cash and cash equivalents, reserve accounts   41,375,630    5,612,541 
Interest receivable (net of reserve of $1,626,140 and $0, respectively)   8,815,596    5,093,561 
Due from affiliate (See Note 7)   
-
    90,968 
Management fee receivable   363,815    362,549 
Other assets   236,861    254,980 
Current tax receivable   467,632    
-
 
Total assets  $1,038,965,598   $876,239,755 
           
LIABILITIES          
Revolving credit facility  $25,000,000   $12,500,000 
Deferred debt financing costs, revolving credit facility   (846,319)   (1,191,115)
SBA debentures payable   242,660,000    185,000,000 
Deferred debt financing costs, SBA debentures payable   (5,560,015)   (4,344,983)
7.00% Notes Payable 2025   12,000,000    
-
 
Discount on 7.00% notes payable 2025   (334,890)   
-
 
Deferred debt financing costs, 7.00% notes payable 2025   (44,030)   
-
 
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   (143,052)   (184,375)
4.375% Notes Payable 2026   175,000,000    175,000,000 
Premium on 4.375% notes payable 2026   904,529    1,086,013 
Deferred debt financing costs, 4.375% notes payable 2026   (2,760,666)   (3,395,435)
4.35% Notes Payable 2027   75,000,000    75,000,000 
Discount on 4.35% notes payable 2027   (425,218)   (499,263)
Deferred debt financing costs, 4.35% notes payable 2027   (1,463,434)   (1,722,908)
6.25% Notes Payable 2027   15,000,000    15,000,000 
Deferred debt financing costs, 6.25% notes payable 2027   (362,531)   (416,253)
6.00% Notes Payable 2027   105,500,000    
-
 
Discount on 6.00% notes payable 2027   (167,325)   
-
 
Deferred debt financing costs, 6.00% notes payable 2027   (3,099,317)   
-
 
8.00% Notes Payable 2027   46,000,000    
-
 
Deferred debt financing costs, 8.00% notes payable 2027   (1,693,973)   
-
 
Base management and incentive fees payable   9,556,891    12,947,025 
Deferred tax liability   2,139,661    1,249,015 
Accounts payable and accrued expenses   1,266,008    799,058 
Current income tax payable   26,836    2,820,036 
Interest and debt fees payable   4,946,725    2,801,621 
Directors fees payable   95,932    70,000 
Due to manager   6,186    263,814 
Excise tax payable   
-
    630,183 
Total liabilities   703,201,998    520,459,232 
           
Commitments and contingencies (See Note 9)   
 
    
 
 
           
NET ASSETS          
Common stock, par value $0.001, 100,000,000 common shares authorized, 11,885,479 and 12,131,350 common shares issued and outstanding, respectively   11,885    12,131 
Capital in excess of par value   321,802,386    328,062,246 
Total distributable earnings   13,949,329    27,706,146 
Total net assets   335,763,600    355,780,523 
Total liabilities and net assets  $1,038,965,598   $876,239,755 
NET ASSET VALUE PER SHARE  $28.25   $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 nine months ended 
   November 30, 2022   November 30, 2021   November 30, 2022   November 30, 2021 
INVESTMENT INCOME                
Interest from investments                
Interest income:                
Non-control/Non-affiliate investments  $19,549,044   $11,152,851   $49,597,660   $33,687,612 
Affiliate investments   1,914,800    1,055,947    4,287,449    2,332,967 
Control investments   1,671,354    1,702,096    4,731,150    5,616,182 
Payment-in-kind interest income:                    
Non-control/Non-affiliate investments   87,130    115,724    258,557    1,002,819 
Affiliate investments   191,860    
-
    221,027    
-
 
Control investments   102,720    110,737    260,161    298,383 
Total interest from investments   23,516,908    14,137,355    59,356,004    42,937,963 
Interest from cash and cash equivalents   200,258    968    235,410    2,561 
Management fee income   818,254    815,739    2,451,242    2,448,593 
Dividend Income   436,941    537,621    949,758    1,595,119 
Structuring and advisory fee income   553,497    582,500    2,813,311    2,922,625 
Other income   731,166    427,921    983,277    1,852,916 
Total investment income   26,257,024    16,502,104    66,789,002    51,759,777 
                     
OPERATING EXPENSES                    
Interest and debt financing expenses   8,449,900    4,842,900    23,243,438    14,367,996 
Base management fees   4,258,821    2,923,676    12,164,989    8,684,681 
Incentive management fees expense   1,531,060    2,417,628    216,915    9,698,327 
Professional fees   558,531    (104,438)   1,344,021    863,376 
Administrator expenses   818,750    750,000    2,341,667    2,156,250 
Insurance   89,187    85,399    266,723    258,035 
Directors fees and expenses   80,000    73,096    300,000    265,596 
General and administrative   525,202    357,727    1,492,063    1,301,603 
Income tax expense (benefit)   68,136    (40,519)   (132,487)   18,082 
Total operating expenses   16,379,587    11,305,469    41,237,329    37,613,946 
NET INVESTMENT INCOME   9,877,437    5,196,635    25,551,673    14,145,831 
                     
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS                    
Net realized gain (loss) from investments:                    
Non-control/Non-affiliate investments   (740,434)   2,588,468    7,365,913    6,140,073 
Affiliate investments   
-
    7,328,457    
-
    7,328,457 
Control investments   
-
    
-
    
-
    (139,867)
Net realized gain (loss) from investments   (740,434)   9,916,925    7,365,913    13,328,663 
Income tax (provision) benefit from realized gain on investments   479,318    (2,447,173)   548,568    (2,896,056)
Net change in unrealized appreciation (depreciation) on investments:                    
Non-control/Non-affiliate investments   2,082,634    3,887,216    (12,430,125)   11,593,037 
Affiliate investments   693,483    (7,412,673)   3,861,523    (1,668,686)
Control investments   (5,952,325)   (2,517,159)   (17,199,511)   4,222,150 
Net change in unrealized appreciation (depreciation) on investments   (3,176,208)   (6,042,616)   (25,768,113)   14,146,501 
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   (425,848)   2,480,465    (1,017,953)   921,610 
Net realized and unrealized gain (loss) on investments   (3,863,172)   3,907,601    (18,871,585)   25,500,718 
Realized losses on extinguishment of debt   
-
    (764,123)   (1,204,809)   (2,316,263)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $6,014,265   $8,340,113   $5,475,279   $37,330,286 
                     
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
  $0.51   $0.73   $0.46   $3.30 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED
   11,893,173    11,450,861    11,989,811    11,312,991 

 

See accompanying notes to consolidated financial statements.

 

2

 

 

Saratoga Investment Corp.

Consolidated Statements of Changes in Net Assets

(unaudited)

 

   For the nine months ended 
   November 30, 2022   November 30, 2021 
INCREASE (DECREASE) FROM OPERATIONS:        
Net investment income  $25,551,673   $14,145,831 
Net realized gain from investments   7,365,913    13,328,663 
Realized losses on extinguishment of debt   (1,204,809)   (2,316,263)
Income tax (provision) benefit from realized gain on investments   548,568    (2,896,056)
Net change in unrealized appreciation (depreciation) on investments   (25,768,113)   14,146,501 
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   (1,017,953)   921,610 
Net increase (decrease) in net assets resulting from operations   5,475,279    37,330,286 
           
DECREASE FROM SHAREHOLDER DISTRIBUTIONS:          
Total distributions to shareholders   (19,232,096)   (15,599,129)
Net decrease in net assets from shareholder distributions   (19,232,096)   (15,599,129)
           
CAPITAL SHARE TRANSACTIONS:          
Proceeds from issuance of common stock   
-
    15,320,818 
Stock dividend distribution   3,347,802    2,760,278 
Repurchases of common stock   (9,600,116)   (1,252,143)
Repurchase fees   (7,792)   (992)
Offering costs   
-
    (143,143)
Net increase (decrease) in net assets from capital share transactions   (6,260,106)   16,684,818 
Total increase (decrease) in net assets   (20,016,923)   38,415,975 
Net assets at beginning of period   355,780,523    304,185,770 
Net assets at end of period  $335,763,600   $342,601,745 

 

See accompanying notes to consolidated financial statements.

  

3

 

 

Saratoga Investment Corp.

Consolidated Statements of Cash Flows

(unaudited)

 

    For the nine months ended  
    November 30, 2022     November 30, 2021  
Operating activities            
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS   $ 5,475,279     $ 37,330,286  
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     1,374,899       (1,120,081 )
Net accretion of discount on investments     (1,245,358 )     (1,368,430 )
Amortization of deferred debt financing costs     2,567,903       1,544,478  
Realized losses on extinguishment of debt     1,204,809       2,316,263  
Income tax expense (benefit)     (681,055 )     18,082  
Net realized (gain) loss from investments     (7,365,913 )     (13,328,663 )
Net change in unrealized (appreciation) depreciation on investments     25,768,113       (14,146,501 )
Net change in provision for deferred taxes on unrealized appreciation (depreciation) on investments     1,017,953       (921,610 )
Proceeds from sales and repayments of investments     162,090,516       216,236,729  
Purchases of investments     (345,088,953 )     (293,753,351 )
(Increase) decrease in operating assets:                
Interest receivable     (3,722,035 )     (343,168 )
Due from affiliate     90,968       2,719,000  
Management and incentive fee receivable     (1,266 )     (330,071 )
Other assets     18,119       (54,299 )
Deferred tax asset     (467,632 )     -  
Increase (decrease) in operating liabilities:                
Base management and incentive fees payable     (3,390,134 )     5,524,592  
Accounts payable and accrued expenses     466,950       210,809  
Tax receivable     -       -  
Current tax payable     (2,793,200 )     2,833,988  
Interest and debt fees payable     2,145,104       450,550  
Directors fees payable     25,932       (70,500 )
Excise tax payable     (630,183 )     (691,672 )
Due to manager     (257,628 )     10,887  
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES     (162,929,180 )     (56,932,682 )
                 
Financing activities                
Borrowings on debt     105,500,000       135,000,000  
Paydowns on debt     (35,340,000 )     (73,500,000 )
Issuance of notes     163,500,000       175,000,000  
Repayments of notes     (43,125,000 )     (60,000,000 )
Payments of deferred debt financing costs     (7,400,318 )     (7,768,038 )
Discount on debt issuance, 6.000% notes 2027     (176,000 )     -  
Discount on debt issuance, 7.000% notes 2025     (360,000 )     -  
Premium on debt issuance, 4.375% notes 2026     -       1,250,000  
Proceeds from issuance of common stock     -       15,320,818  
Payments of cash dividends     (15,884,294 )     (12,838,851 )
Repurchases of common stock     (9,600,116 )     (1,252,143 )
Repurchases fees     (7,792 )     (992 )
Payments of offering costs     -       (124,714 )
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES     157,106,480       171,086,080  
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS     (5,822,700 )     114,153,398  
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   $ 47,047,642     $ 144,068,472  
                 
Supplemental information:                
Interest paid during the period   $ 18,374,593     $ 12,372,967  
Cash paid for taxes     2,770,984       727,469  
Supplemental non-cash information:                
Payment-in-kind interest income and other adjustments to cost     1,374,899     1,120,081  
Net accretion of discount on investments     1,245,358       1,368,430  
Amortization of deferred debt financing costs     2,567,903       1,544,478  
Stock dividend distribution     3,347,802       2,760,278  

 

See accompanying notes to consolidated financial statements.

 

4

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

November 30, 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 - 231.7% (b)                         
Altvia MidCo, LLC.  Alternative Investment Management Software  First Lien Term Loan (3M USD TERM SOFR+8.50%), 12.91% Cash, 7/18/2027  7/18/2022  $8,000,000    7,924,459   $7,920,000    2.4%
Altvia MidCo, LLC. (h)  Alternative Investment Management Software  Series A-1 Preferred Shares  7/18/2022  $2,000,000    2,000,000    2,000,000    0.6%
     Total Alternative Investment Management Software           9,924,459    9,920,000    3.0%
Schoox, Inc. (h), (i)  Corporate Education Software  Series 1 Membership Interest  12/8/2020   1,050    475,698    3,723,862    1.1%
     Total Corporate Education Software           475,698    3,723,862    1.1%
GreyHeller LLC (h)  Cyber Security  Common Stock  11/10/2021   7,857,689    1,906,275    2,484,154    0.7%
     Total Cyber Security           1,906,275    2,484,154    0.7%
New England Dental Partners  Dental Practice Management  First Lien Term Loan (3M USD LIBOR+8.00%), 12.78% Cash, 11/25/2025  11/25/2020  $6,555,000    6,511,617    6,547,134    1.9%
New England Dental Partners  Dental Practice Management  Delayed Draw Term Loan (3M USD LIBOR+8.00%), 12.78% Cash, 11/25/2025  11/25/2020  $4,650,000    4,625,008    4,644,420    1.4%
     Total Dental Practice Management           11,136,625    11,191,554    3.3%
Exigo, LLC (d)  Direct Selling Software  First Lien Term Loan (1M USD LIBOR+5.75%), 9.89% Cash, 3/16/2027  3/16/2022  $24,875,000    24,682,800    24,484,463    7.3%
Exigo, LLC (j)  Direct Selling Software  Delayed Draw Term Loan (1M USD LIBOR+5.75%), 9.89% Cash, 3/16/2027  3/16/2022  $-    -    (65,417)   0.0%
Exigo, LLC (j)  Direct Selling Software  Revolving Credit Facility (1M USD LIBOR+5.75%), 9.89% Cash, 3/16/2027  3/16/2022  $208,333    208,333    191,979    0.1%
Exigo, LLC (h), (i)  Direct Selling Software  Common Units  3/16/2022   1,041,667    1,041,667    1,101,027    0.3%
     Total Direct Selling Software           25,932,800    25,712,052    7.7%

 

5

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original
Acquisition
Date
  Principal/
Number of
Shares
   Cost   Fair
Value (c)
   %  of
Net Assets
 
C2 Educational Systems (d)  Education Services  First Lien Term Loan (3M USD LIBOR+8.50%), 13.28% Cash, 5/31/2023  5/31/2017  $18,500,000    18,492,604    18,524,050    5.5%
C2 Education Systems, Inc. (h)  Education Services  Series A-1 Preferred Stock  5/18/2021   3,127    499,904    603,868    0.2%
Zollege PBC  Education Services  First Lien Term Loan (3M USD LIBOR+5.50%), 10.28% Cash, 5/11/2026  5/11/2021  $16,000,000    15,894,425    14,827,200    4.4%
Zollege PBC (j)  Education Services  Delayed Draw Term Loan (3M USD LIBOR+5.50%), 10.28% Cash, 5/11/2026  5/11/2021  $500,000    496,563    390,050    0.1%
Zollege PBC (h)  Education Services  Class A Units  5/11/2021   250,000    250,000    159,497    0.0%
     Total Education Services           35,633,496    34,504,665    10.2%
Destiny Solutions Inc. (h), (i)  Education Software  Limited Partner Interests  5/16/2018   3,068    3,969,291    8,742,860    2.6%
GoReact  Education Software  First Lien Term Loan (3M USD LIBOR+7.50%), 12.28% Cash, 1/17/2025  1/17/2020  $8,000,000    7,938,400    7,795,200    2.3%
GoReact (j)  Education Software  Delayed Draw Term Loan (3M USD LIBOR+7.50%), 12.28% Cash, 1/17/2025  1/18/2022  $1,000,000    1,000,000    961,600    0.3%
Identity Automation Systems (h)  Education Software  Common Stock Class A-2 Units  8/25/2014   232,616    232,616    146,008    0.0%
Identity Automation Systems (h)  Education Software  Common Stock Class A-1 Units  3/6/2020   43,715    171,571    213,157    0.1%
Ready Education  Education Software  First Lien Term Loan (3M USD TERM SOFR+6.00%), 10.41% Cash, 8/5/2027  8/5/2022  $27,000,000    26,737,018    26,730,000    8.0%
     Total Education Software           40,048,896    44,588,825    13.3%
TG Pressure Washing Holdings, LLC (h)  Facilities Maintenance  Preferred Equity  8/12/2019   488,148    488,148    405,613    0.1%
     Total Facilities Maintenance           488,148    405,613    0.1%
Davisware, LLC  Field Service Management  First Lien Term Loan (3M USD LIBOR+7.00%), 11.78% Cash, 7/31/2024  9/6/2019  $6,000,000    5,967,251    5,934,600    1.8%
Davisware, LLC (j)  Field Service Management  Delayed Draw Term Loan (3M USD LIBOR+7.00%), 11.78% Cash, 7/31/2024  9/6/2019  $1,977,790    1,966,562    1,956,232    0.6%
     Total Field Service Management           7,933,813    7,890,832    2.4%

 

6

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original
Acquisition
Date
  Principal/
Number of
Shares
   Cost   Fair
Value (c)
   %  of
Net Assets
 
B. Riley Financial, Inc. (a), (m)  Financial Services  Senior Unsecured Loan 6.75% Cash, 5/31/2024  10/18/2022  $165,301    165,301    164,508    0.0%
GDS Software Holdings, LLC  Financial Services  First Lien Term Loan (3M USD LIBOR+7.00%), 11.78% Cash, 12/30/2026  12/30/2021  $22,713,926    22,592,997    22,277,819    6.6%
GDS Software Holdings, LLC  Financial Services  Delayed Draw Term Loan (3M USD LIBOR+7.00%), 11.78% Cash, 12/30/2026  12/30/2021  $3,286,074    3,256,113    3,222,981    1.0%
GDS Software Holdings, LLC (h)  Financial Services  Common Stock Class A Units  8/23/2018   250,000    250,000    510,438    0.2%
     Total Financial Services           26,264,411    26,175,746    7.8%
Ascend Software, LLC  Financial Services Software  First Lien Term Loan (3M USD LIBOR+7.50%), 12.28% Cash, 12/15/2026  12/15/2021  $6,000,000    5,949,123    5,889,600    1.8%
Ascend Software, LLC (j)  Financial Services Software  Delayed Draw Term Loan (3M USD LIBOR+7.50%), 12.28% Cash, 12/15/2026  12/15/2021  $2,300,000    2,278,586    2,180,400    0.6%
     Total Financial Services Software           8,227,709    8,070,000    2.4%
Axiom Parent Holdings, LLC (h)  Healthcare Services  Common Stock Class A Units  6/19/2018   400,000    400,000    1,251,380    0.4%
ComForCare Health Care (d)  Healthcare Services  First Lien Term Loan (3M USD LIBOR+6.25%), 11.03% Cash, 1/31/2025  1/31/2017  $25,000,000    24,923,185    25,000,000    7.4%
     Total Healthcare Services           25,323,185    26,251,380    7.8%

 

7

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original
Acquisition
Date
  Principal/
Number of
Shares
   Cost   Fair
Value (c)
   %  of
Net Assets
 
HemaTerra Holding Company, LLC (d)  Healthcare Software  First Lien Term Loan (3M USD TERM SOFR+8.25%), 12.66% Cash, 1/31/2026  4/15/2019  $55,623,000    55,201,050    55,578,502    16.6%
HemaTerra Holding Company, LLC  Healthcare Software  Delayed Draw Term Loan (3M USD TERM SOFR+8.25%), 12.66% Cash, 1/31/2026  4/15/2019  $13,930,000    13,856,418    13,918,856    4.1%
TRC HemaTerra, LLC (h)  Healthcare Software  Class D Membership Interests  4/15/2019   2,487    2,816,693    4,350,225    1.3%
Procurement Partners, LLC  Healthcare Software  First Lien Term Loan (3M USD LIBOR+5.50%), 10.28% Cash, 11/12/2025  11/12/2020  $35,125,000    34,878,261    34,355,763    10.2%
Procurement Partners, LLC  Healthcare Software  Delayed Draw Term Loan (3M USD LIBOR+5.50%), 10.28% Cash, 11/12/2025  11/12/2020  $4,300,000    4,262,142    4,205,830    1.3%
Procurement Partners Holdings LLC (h)  Healthcare Software  Class A Units  11/12/2020   550,986    550,986    751,911    0.2%
     Total Healthcare Software           111,565,550    113,161,087    33.7%
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%), 12.28% Cash, 12/22/2025  12/22/2020  $3,136,517    3,115,448    3,136,517    0.9%
Book4Time, Inc. (a)  Hospitality/Hotel  Delayed Draw Term Loan (3M USD LIBOR+7.50%), 12.28% Cash, 12/22/2025  12/22/2020  $2,000,000    1,982,829    2,000,000    0.6%
Book4Time, Inc. (a), (h), (i)  Hospitality/Hotel  Class A Preferred Shares  12/22/2020   200,000    156,826    256,275    0.1%
Knowland Group, LLC (h), (k)  Hospitality/Hotel  Second Lien Term Loan (3M USD LIBOR+8.00%), 12.78% Cash/1.00% PIK, 5/9/2024  11/9/2018  $15,878,989    15,878,989    9,741,760    2.9%
Sceptre Hospitality Resources, LLC  Hospitality/Hotel  First Lien Term Loan (3M USD TERM SOFR+7.25%), 11.66% Cash, 9/2/2026  4/27/2020  $23,000,000    22,789,543    22,783,800    6.8%
Sceptre Hospitality Resources, LLC (j)  Hospitality/Hotel  Delayed Draw Term Loan (3M USD TERM SOFR+7.25%), 11.66% Cash, 9/2/2026  9/2/2021  $-    -    -    0.0%
     Total Hospitality/Hotel           43,923,635    37,918,352    11.3%

 

8

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original
Acquisition
Date
  Principal/
Number of
Shares
   Cost   Fair
Value (c)
   %  of
Net Assets
 
Granite Comfort, LP (d)  HVAC Services and Sales  First Lien Term Loan (3M USD TERM SOFR+8.02%), 12.43% Cash, 11/16/2025  11/16/2020  $43,000,000    42,666,886    42,570,000    12.7%
Granite Comfort, LP (j)  HVAC Services and Sales  Delayed Draw Term Loan (3M USD TERM SOFR+8.02%), 12.43% Cash, 11/16/2025  11/16/2020  $6,500,000    6,439,613    6,435,000    1.9%
     Total HVAC Services and Sales           49,106,499    49,005,000    14.6%
Vector Controls Holding Co., LLC (d)  Industrial Products  First Lien Term Loan (3M USD LIBOR+6.50%), 11.28% Cash, 3/6/2025  3/6/2013  $3,477,686    3,477,686   3,477,687     1.0 % 
Vector Controls Holding Co., LLC (h)  Industrial Products  Warrants to Purchase Limited Liability Company Interests, Expires 11/30/2027  5/31/2015   343    -    5,612,524    1.7%
     Total Industrial Products           3,477,686    9,090,211    2.7%
AgencyBloc, LLC  Insurance Software  First Lien Term Loan (1M USD BSBY+8.00%), 11.97% Cash, 10/1/2026  10/1/2021  $13,500,000    13,396,690    13,444,650    4.0%
Panther ParentCo LLC (h)  Insurance Software  Class A Units  10/1/2021   2,500,000    2,500,000    3,155,741    0.9%
     Total Insurance Software           15,896,690    16,600,391    4.9%
LogicMonitor, Inc. (d)  IT Services  First Lien Term Loan (3M USD LIBOR+5.00%), 9.78% Cash, 5/17/2023  3/20/2020  $43,000,000    42,913,067    43,000,000    12.8%
     Total IT Services           42,913,067    43,000,000    12.8%
ActiveProspect, Inc. (d)  Lead Management Software  First Lien Term Loan (3M USD LIBOR+6.00%), 10.78% Cash, 8/8/2027  8/8/2022  $12,000,000    11,899,180    11,895,600    3.5%
ActiveProspect, Inc. (j)  Lead Management Software  Delayed Draw Term Loan (3M USD LIBOR+6.00%), 10.78% Cash, 8/8/2027  8/8/2022  $-    -    -    0.0%
     Total Lead Management Software           11,899,180    11,895,600    3.5%

 

9

 

 

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%), 11.88% Cash, 1/18/2027  1/18/2022  $21,300,960    21,097,037    20,691,753    6.2%
     Total Legal Software           21,097,037    20,691,753    6.2%
Madison Logic, Inc. (d)  Marketing Orchestration Software  First Lien Term Loan (1M USD LIBOR+5.50%), 9.64% Cash, 11/22/2026  12/10/2021  $28,698,795    28,586,044    28,675,836    8.5%
Madison Logic, Inc. (j)  Marketing Orchestration Software  Revolving Credit Facility (1M USD LIBOR+5.50%), 9.64% Cash, 11/22/2026  12/10/2021  $-    -    -    0.0%
     Total Marketing Orchestration Software           28,586,044    28,675,836    8.5%
ARC Health OpCo LLC (d)  Mental Healthcare Services  First Lien Term Loan (3M USD TERM SOFR+8.49%), 12.90% Cash, 8/5/2027  8/5/2022  $6,500,000    6,422,385    6,418,750    1.9%
ARC Health OpCo LLC (d), (j)  Mental Healthcare Services   Delayed Draw Term Loan (3M USD TERM SOFR+8.49%), 12.90% Cash, 8/5/2027   8/5/2022  $7,726,978    7,632,170    7,630,391    2.3%
ARC Health OpCo LLC (h)  Mental Healthcare Services  Class A Preferred Shares  8/5/2022   2,587,236    2,794,214    2,794,215    0.8%
     Total Mental Healthcare Services           16,848,769    16,843,356    5.0%
Chronus LLC  Mentoring Software  First Lien Term Loan (3M USD LIBOR+5.25%), 10.03% Cash, 8/26/2026  8/26/2021  $15,000,000    14,880,506    14,874,000    4.4%
Chronus LLC  Mentoring Software  First Lien Term Loan (3M USD LIBOR+6.00%), 10.78% Cash, 8/26/2026  8/26/2021  $3,000,000    2,971,230    2,974,800    0.9%
Chronus LLC (h)  Mentoring Software  Series A Preferred Stock  8/26/2021   3,000    3,000,000    3,564,437    1.1%
     Total Mentoring Software           20,851,736    21,413,237    6.4%
Omatic Software, LLC  Non-profit Services  First Lien Term Loan (3M USD TERM SOFR+8.00%), 12.41% Cash/1.00% PIK, 5/29/2023  5/29/2018  $13,089,665    13,036,832    13,035,998    3.9%
     Total Non-profit Services           13,036,832    13,035,998    3.9%

 

10

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original
Acquisition
Date
  Principal/
Number of
Shares
   Cost   Fair
Value (c)
   %  of
Net Assets
 
Emily Street Enterprises, L.L.C.  Office Supplies  Senior Secured Note (3M USD LIBOR+8.50%), 13.28% Cash, 2/31/2023  12/28/2012  $3,300,000    3,300,000    3,249,510    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    354,649    0.1%
     Total Office Supplies           3,700,000    3,604,159    1.1%
Apex Holdings Software Technologies, LLC  Payroll Services  First Lien Term Loan (3M USD LIBOR+8.00%), 12.78% Cash, 9/21/2024  9/21/2016  $15,500,000    15,493,229    15,489,150    4.6%
     Total Payroll Services           15,493,229    15,489,150    4.6%
Buildout, Inc.  Real Estate Services  First Lien Term Loan (3M USD LIBOR+7.00%), 11.78% Cash, 7/9/2025  7/9/2020  $14,000,000    13,915,108    13,843,200    4.1%
Buildout, Inc.  Real Estate Services  Delayed Draw Term Loan (3M USD LIBOR+7.00%), 11.78% Cash, 7/9/2025  2/12/2021  $38,500,000    38,229,236    38,068,800    11.4%
Buildout, Inc. (h), (i)  Real Estate Services  Limited Partner Interests  7/9/2020   1,160    1,205,308    1,307,141    0.4%
     Total Real Estate Services           53,349,652    53,219,141    15.9%
Wellspring Worldwide Inc.  Research Software  First Lien Term Loan (3M USD BSBY+7.25%), 11.84% Cash, 6/27/2027  6/27/2022  $9,600,000    9,499,135    9,493,440    2.8%
Archimedes Parent LLC (h)  Research Software  Class A Common Units  6/27/2022   1,000,000    1,000,000    1,000,000    0.3%
     Total Research Software           10,499,135    10,493,440    3.1%
LFR Chicken LLC  Restaurant  First Lien Term Loan (1M USD LIBOR+7.00%), 11.14% Cash, 11/19/2026  11/19/2021  $12,000,000    11,901,087    11,817,600    3.6%
LFR Chicken LLC (j)  Restaurant  Delayed Draw Term Loan (1M USD LIBOR+7.00%), 11.14% Cash, 11/19/2026  11/19/2021  $9,000,000    8,922,513    8,863,200    2.6%
LFR Chicken LLC (h)  Restaurant  Series B Preferred Units  11/19/2021   497,183    1,000,000    1,108,405    0.3%
TMAC Acquisition Co., LLC  Restaurant  Unsecured Term Loan 8.00% PIK, 9/1/2023  3/1/2018  $2,979,312    2,979,312    2,815,105    0.8%
     Total Restaurant           24,802,912    24,604,310    7.3%

 

11

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original
Acquisition
Date
  Principal/
Number of
Shares
   Cost   Fair
Value (c)
   %  of
Net Assets
 
Pepper Palace, Inc. (d)  Specialty Food Retailer  First Lien Term Loan (3M USD LIBOR+6.25%), 11.03% Cash, 6/30/2026  6/30/2021  $33,575,000    33,313,811    24,325,088    7.2%
Pepper Palace, Inc. (j)  Specialty Food Retailer  Delayed Draw Term Loan (3M USD LIBOR+6.25%), 11.03% Cash, 6/30/2026  6/30/2021  $-    -    -    0.0%
Pepper Palace, Inc. (j)  Specialty Food Retailer  Revolving Credit Facility (3M USD LIBOR+6.25%), 11.03% 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           34,313,811    24,325,088    7.2%
ArbiterSports, LLC (d)  Sports Management  First Lien Term Loan (3M USD LIBOR+6.50%), 11.28% Cash, 2/21/2025  2/21/2020  $26,000,000    25,882,301    25,810,200    7.7%
ArbiterSports, LLC  Sports Management  Delayed Draw Term Loan (3M USD LIBOR+6.50%), 11.28% Cash, 2/21/2025  2/21/2020  $1,000,000    1,000,000    992,700    0.3%
     Total Sports Management           26,882,301    26,802,900    8.0%
Avionte Holdings, LLC (h)  Staffing Services  Class A Units  1/8/2014   100,000    100,000    2,080,370    0.6%
     Total Staffing Services           100,000    2,080,370    0.6%
JDXpert  Talent Acquisition Software  First Lien Term Loan (3M USD LIBOR+8.50%), 13.28% Cash, 5/2/2027  5/2/2022  $6,000,000    5,943,524    6,039,000    1.9%
JDXpert (j)  Talent Acquisition Software  Delayed Draw Term Loan (3M USD LIBOR+8.50%), 13.28% Cash, 5/2/2027  5/2/2022  $-    -    -    0.0%
Jobvite, Inc. (d)  Talent Acquisition Software  First Lien Term Loan (6M USD TERM SOFR+8.00%), 12.70% Cash, 8/5/2028  8/5/2022  $20,000,000    19,852,834    20,000,000    6.0%
     Total Talent Acquisition Software           25,796,358    26,039,000    7.9%
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                 776,943,715    777,907,062    231.7%

 

12

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original
Acquisition
Date
  Principal/
Number of
Shares
   Cost   Fair
Value (c)
   %  of
Net Assets
 
Affiliate investments - 28.6% (b)                             
Artemis Wax Corp. (d), (f)  Consumer Services  Delayed Draw Term Loan (1M USD LIBOR+9.00%), 13.14% Cash, 5/20/2026  5/20/2021  $30,000,000    29,760,680    29,967,000    8.9%
Artemis Wax Corp. (f)  Consumer Services  Delayed Draw Term Loan (1M USD LIBOR+6.50%), 10.64% Cash, 5/20/2026  5/19/2022  $18,000,000    17,832,599    17,980,200    5.5%
Artemis Wax Corp. (f), (j)  Consumer Services  Delayed Draw Term Loan (1M USD LIBOR+7.50%), 11.64% Cash, 5/20/2026  5/19/2022  $9,500,000    9,407,532    9,489,550    2.8%
Artemis Wax Corp. (f), (h)  Consumer Services  Series B-1 Preferred Stock  5/20/2021   934,463    1,500,000    4,977,250    1.5%
Artemis Wax Corp. (f), (h)  Consumer Services  Series C Preferred Stock  5/20/2021   6,163    6,162,526    6,162,526    1.8%
     Total Consumer Services           64,663,337    68,576,526    20.5%
ETU Holdings, Inc. (f)  Corporate Education Software  First Lien Term Loan (3M USD LIBOR+9.00%), 13.78% Cash, 8/18/2027  8/18/2022  $7,000,000    6,932,059    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  $5,089,583    5,039,831    5,038,688    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           14,971,890    14,968,688    4.5%

 

13

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original
Acquisition
Date
  Principal/
Number of
Shares
   Cost   Fair
Value (c)
   %  of
Net Assets
 
Axero Holdings, LLC (f)  Employee Collaboration Software  First Lien Term Loan (3M USD LIBOR+10.00%), 14.78% Cash, 6/30/2026  6/30/2021  $5,500,000    5,455,829    5,529,150    1.6%
Axero Holdings, LLC (f)  Employee Collaboration Software  Delayed Draw Term Loan (3M USD LIBOR+10.00%), 14.78% Cash, 6/30/2026  6/30/2021  $1,100,000    1,089,888    1,105,830    0.3%
Axero Holdings, LLC (f), (j)  Employee Collaboration Software  Revolving Credit Facility (3M USD LIBOR+10.00%), 14.78% 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    2,425,000    0.7%
Axero Holdings, LLC (f), (h)  Employee Collaboration Software  Series B Preferred Units  6/30/2021   2,000,000    2,000,000    3,446,470    1.0%
     Total Employee Collaboration Software           10,545,717    12,506,450    3.6%
Sub Total Affiliate investments                 90,180,944    96,051,664    28.6%
Control investments - 32.2% (b)                             
Netreo Holdings, LLC (g)  IT Services  First Lien Term Loan (3M USD LIBOR+6.50%), 11.28% Cash/2.00% PIK, 12/31/2025  7/3/2018  $5,511,426    5,491,258    5,414,976    1.6%
Netreo Holdings, LLC (d), (g), (j)  IT Services  Delayed Draw Term Loan (3M USD LIBOR+6.50%), 11.28% Cash/2.00% PIK, 12/31/2025  5/26/2020  $19,661,882    19,583,424    19,317,799    5.8%
Netreo Holdings, LLC (g), (h)  IT Services  Common Stock Class A Unit  7/3/2018   4,600,677    8,344,500    17,661,450    5.3%
     Total IT Services           33,419,182    42,394,225    12.7%

 

14

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original
Acquisition
Date
  Principal/
Number of
Shares
   Cost   Fair
Value (c)
   %  of
Net Assets
 
Saratoga Investment Corp. CLO 2013-1, Ltd. (a), (e), (g)  Structured Finance Securities  Other/Structured Finance Securities 0.00%, 4/20/2023  1/22/2008  $111,000,000    29,969,356    19,427,844    5.8%
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%), 14.78% Cash, 4/20/2023  8/9/2021  $9,375,000    9,375,000    8,501,620    2.5%
Saratoga Investment Corp Senior Loan Fund 2022-1 Ltd Class E Note (a), (g)  Structured Finance Securities  Other/Structured Finance Securities (3M USD TERM SOFR+8.55%), 12.96% Cash, 10/20/2033  10/28/2022  $12,250,000    11,392,500    10,969,982    3.3%
     Total Structured Finance Securities           50,736,856    38,899,446    11.6%
Saratoga Senior Loan Fund I JV, LLC (a), (g), (j)  Investment Fund  Unsecured Loan 10.00%, 6/15/2023  2/17/2022  $17,618,954    17,618,954    17,618,954    5.2%
Saratoga Senior Loan Fund I JV, LLC (a), (g), (h)  Investment Fund  Membership Interest  2/17/2022   17,583,486    17,583,486    9,162,701    2.7%
     Total Investment Fund           35,202,440    26,781,655    7.9%
Sub Total Control investments                 119,358,478    108,075,326    32.2%
Total Investments - 292.5%                $986,483,137   $982,034,052    292.5%

 

15

 

 

   Number of Shares   Cost   Fair Value   % of
Net Assets
 
Cash and cash equivalents and cash and cash equivalents, reserve accounts - 14.0% (b)                
U.S. Bank Money Market (l)   47,047,642   $47,047,642   $47,047,642    14.0%
Total cash and cash equivalents and cash and cash equivalents, reserve accounts   47,047,642   $47,047,642   $47,047,642    14.0%

 

(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 November 30, 2022, non-qualifying assets represent 8.6% 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 $335,763,600 as of November 30, 2022.

 

(c) Because there is no “readily available market quotations” (as defined in the 1940 Act) for these investments, except for B. Riley Financial, Inc., 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). B. Riley Financial, Inc.’s fair value is based on quoted prices in active markets, identical assets or liabilities that the Company has the ability to access. These investments have been included as Level 1 in the Fair Value Hierarchy (see Note 3 to the consolidated financial statements).

 

(d) These securities are either fully or partially pledged as collateral under the Company’s senior secured revolving credit facility (see Note 8 to the consolidated financial statements).

 

(e) This investment does not have a stated interest rate that is payable thereon. As a result, the 0.00% interest rate in the table above represents the effective interest rate currently earned on the investment cost and is based on the current cash interest and other income generated by the investment.

 

16

 

 

(f) As defined in the 1940 Act, this portfolio company is an “affiliate” as we own between 5.0% and 25.0% of the outstanding voting securities. Transactions during the nine months ended November 30, 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.  $27,440,000   $
    -
   $3,418,378   $
                -
   $
            -
   $2,452,903 
Axero Holdings, LLC   1,089,000    
-
    609,408    
-
    
-
    1,411,823 
ETU Holdins, Inc.   14,880,000    
-
    480,690    
-
    
-
    (3,202)
Total  $43,409,000   $
-
   $4,508,476   $
-
   $
-
   $3,861,524 

 

(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. In addition, we “control” Saratoga Investment Corp Senior Loan Fund 2022-1 Ltd. (“SLF 2022”) because SLF 2022 is a wholly owned subsidiary of Saratoga Senior Loan Fund I JV, LLC, of which we own more than 25% of the outstanding voting shares. Transactions during the nine months ended November 30, 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  $5,960,000   $
-
   $1,695,950   $
-
   $
          -
   $(1,668,472)
Saratoga Investment Corp. CLO 2013-1, Ltd.   
-
    
-
    1,228,486    2,451,242    
-
    (6,923,291)
Saratoga Investment Corp Senior Loan Fund 2022-1, Ltd.   11,392,500    
-
    148,285    
-
    
-
    (422,518)
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-2-R-3 Note   
-
    
-
    855,965    
-
    
-
    (873,380)
Saratoga Senior Loan Fund I JV, LLC   4,493,954    
-
    1,062,625    
-
    
-
    
-
 
Saratoga Senior Loan Fund I JV, LLC   4,458,486    
-
    
-
    
-
    
-
    (7,311,849)
Total  $26,304,940   $
-
   $4,991,311   $2,451,242   $
-
   $(17,199,510)

 

(h) Non-income producing at November 30, 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 November 30, 2022. (See Note 9 to the consolidated financial statements).

 

(k) As of November 30, 2022, the investment was on non-accrual status. The fair value of these investments was approximately $9.7 million, which represented 2.9% of the Company’s portfolio (see Note 2 to the consolidated financial statements).

 

(l) Included within cash and cash equivalents and cash and cash equivalents, reserve accounts in the Company’s consolidated statements of assets and liabilities as of November 30, 2022.

 

(m) The fair value of these investments are based on quoted prices in active markets, identical assets or liabilities that the Company has the ability to access. These investments have been included as Level 1 in the Fair Value Hierarchy (see Note 3 to the consolidated financial statements).

 

BSBY - Bloomberg Short-Term Bank Yield

LIBOR - London Interbank Offered Rate

SOFR - Secured Overnight Financing Rate

 

1M USD BSBY - The 1 month USD BSBY rate as of November 30, 2022 was 3.97%.

3M USD BSBY - The 3 month USD BSBY rate as of November 30, 2022 was 4.59%.

1M USD LIBOR - The 1 month USD LIBOR rate as of November 30, 2022 was 4.14%.

3M USD LIBOR - The 3 month USD LIBOR rate as of November 30, 2022 was 4.78%.

1M USD TERM SOFR - The 1 month USD TERM SOFR rate as of November 30, 2022 was 4.13%

3M USD TERM SOFR - The 3 month USD TERM SOFR rate as of November 30, 2022 was 4.41%

6M USD TERM SOFR - The 6 month USD TERM SOFR rate as of November 30, 2022 was 4.70%

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

 

17

 

 

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%

 

18

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original
Acquisition
Date
  Principal/
Number of
Shares
   Cost   Fair
Value (c)
   % of
Net Assets
 
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%
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%

 

19

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity
  Original
Acquisition
Date
  Principal/
Number of
Shares
   Cost   Fair
Value (c)
   % of
Net Assets
 
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