View:
Download DOC
Download PDF
Download XLS
Download XBRL

 

 

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, 2023

 

☐ 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
8.50% Notes due 2027   SAZ   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 6, 2023 was 13,114,977.

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
PART I. FINANCIAL INFORMATION 1
     
Item 1. Consolidated Financial Statements 1
     
  Consolidated Statements of Assets and Liabilities as of August 31, 2023 (unaudited) and February 28, 2023 1
     
  Consolidated Statements of Operations for the three months and six ended August 31, 2023 (unaudited) and August 31, 2022 (unaudited) 2
     
  Consolidated Statements of Changes in Net Assets for three and six months ended August 31, 2023 (unaudited) and August 31, 2022 (unaudited) 3
     
  Consolidated Statements of Cash Flows for the six months ended August 31, 2023 (unaudited) and August 31, 2022 (unaudited) 4
     
  Consolidated Schedules of Investments as of August 31, 2023 (unaudited) and February 28, 2023 5
     
  Notes to Consolidated Financial Statements as of August 31, 2023 (unaudited) 27
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 100
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 139
     
Item 4. Controls and Procedures 140
     
PART II. OTHER INFORMATION 141
     
Item 1. Legal Proceedings 141
     
Item 1A. Risk Factors 141
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 142
     
Item 3. Defaults Upon Senior Securities 142
     
Item 4. Mine Safety Disclosures 142
     
Item 5. Other Information 142
     
Item 6. Exhibits 143
     
Signatures 147

 

i

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

Saratoga Investment Corp.

Consolidated Statements of Assets and Liabilities

 

   August 31,
2023		   February 28,
2023		 
   (unaudited)     
ASSETS        
Investments at fair value        
Non-control/Non-affiliate investments (amortized cost of $953,247,363 and $819,966,208, respectively)  $947,924,370   $828,028,800 
Affiliate investments (amortized cost of $44,385,672 and $25,722,320, respectively)   46,763,587    28,305,871 
Control investments (amortized cost of $117,270,707 and $120,800,829, respectively)   104,256,803    116,255,582 
Total investments at fair value (amortized cost of $1,114,903,742 and $966,489,357, respectively)   1,098,944,760    972,590,253 
Cash and cash equivalents   19,305,025    65,746,494 
Cash and cash equivalents, reserve accounts   29,127,875    30,329,779 
Interest receivable (net of reserve of $4,673,871 and $2,217,300, respectively)   8,032,228    8,159,951 
Management fee receivable   364,717    363,809 
Other assets   436,948    531,337 
Current tax receivable   99,676    436,551 
Total assets  $1,156,311,229   $1,078,158,174 
           
LIABILITIES          
Revolving credit facility  $35,000,000   $32,500,000 
Deferred debt financing costs, revolving credit facility   (1,111,801)   (1,344,005)
SBA debentures payable   189,000,000    202,000,000 
Deferred debt financing costs, SBA debentures payable   (5,640,013)   (4,923,488)
8.75% Notes Payable 2024   20,000,000    
-
 
Discount on 8.75% notes payable 2024   (435,518)   
-
 
Deferred debt financing costs, 8.75% notes payable 2024   (18,465)   
-
 
7.00% Notes Payable 2025   12,000,000    12,000,000 
Discount on 7.00% notes payable 2025   (251,800)   (304,946)
Deferred debt financing costs, 7.00% notes payable 2025   (32,121)   (40,118)
7.75% Notes Payable 2025   5,000,000    5,000,000 
Deferred debt financing costs, 7.75% notes payable 2025   (101,880)   (129,528)
4.375% Notes Payable 2026   175,000,000    175,000,000 
Premium on 4.375% notes payable 2026   718,718    830,824 
Deferred debt financing costs, 4.375% notes payable 2026   (2,128,206)   (2,552,924)
4.35% Notes Payable 2027   75,000,000    75,000,000 
Discount on 4.35% notes payable 2027   (347,969)   (408,932)
Deferred debt financing costs, 4.35% notes payable 2027   (1,204,903)   (1,378,515)
6.25% Notes Payable 2027   15,000,000    15,000,000 
Deferred debt financing costs, 6.25% notes payable 2027   (309,003)   (344,949)
6.00% Notes Payable 2027   105,500,000    105,500,000 
Discount on 6.00% notes payable 2027   (141,155)   (159,334)
Deferred debt financing costs, 6.00% notes payable 2027   (2,573,601)   (2,926,637)
8.00% Notes Payable 2027   46,000,000    46,000,000 
Deferred debt financing costs, 8.00% notes payable 2027   (1,447,465)   (1,622,376)
8.125% Notes Payable 2027   60,375,000    60,375,000 
Deferred debt financing costs, 8.125% notes payable 2027   (1,766,716)   (1,944,536)
8.50% Notes Payable 2028   57,500,000    
-
 
Deferred debt financing costs, 8.50% notes payable 2028   (1,882,934)   
-
 
Base management and incentive fees payable   9,169,859    12,114,878 
Deferred tax liability   2,786,512    2,816,572 
Accounts payable and accrued expenses   1,965,484    1,464,343 
Interest and debt fees payable   3,231,853    3,652,936 
Directors fees payable   
-
    14,932 
Due to manager   378,598    10,935 
Total liabilities   794,232,474    731,200,132 
           
Commitments and contingencies (See Note 9)   
 
    
 
 
           
NET ASSETS          
Common stock, par value $0.001, 100,000,000 common shares authorized, 12,729,781 and 11,890,500 common shares issued and outstanding, respectively   12,730    11,891 
Capital in excess of par value   345,876,725    321,893,806 
Total distributable earnings   16,189,300    25,052,345 
Total net assets   362,078,755    346,958,042 
Total liabilities and net assets  $1,156,311,229   $1,078,158,174 
NET ASSET VALUE PER SHARE  $28.44   $29.18 

 

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,
2023		   August 31,
2022		   August 31,
2023		   August 31,
2022		 
INVESTMENT INCOME                
Interest from investments                
Interest income:                
Non-control/Non-affiliate investments  $28,489,719   $16,197,470   $54,800,512   $30,048,616 
Affiliate investments   907,064    1,322,501    1,634,150    2,372,649 
Control investments   2,085,448    1,513,666    4,131,308    3,059,796 
Payment-in-kind interest income:                    
Non-control/Non-affiliate investments   493,338    85,746    618,233    171,427 
Affiliate investments   215,547    29,167    423,136    29,167 
Control investments   142,289    84,220    283,852    157,441 
Total interest from investments   32,333,405    19,232,770    61,891,191    35,839,096 
Interest from cash and cash equivalents   539,093    34,435    1,343,382    35,152 
Management fee income   817,250    817,024    1,634,038    1,632,988 
Dividend Income   1,631,583    212,688    3,472,513    512,817 
Structuring and advisory fee income   45,000    1,408,086    1,474,222    2,259,814 
Other income   147,814    147,843    330,842    252,111 
Total investment income   35,514,145    21,852,846    70,146,188    40,531,978 
                     
OPERATING EXPENSES                    
Interest and debt financing expenses   12,413,462    7,922,025    24,106,284    14,793,538 
Base management fees   4,840,899    4,104,105    9,405,088    7,906,168 
Incentive management fees expense (benefit)   2,481,473    589,840    2,584,821    (1,314,145)
Professional fees   486,673    368,165    972,723    785,490 
Administrator expenses   904,167    772,917    1,722,917    1,522,917 
Insurance   81,901    90,226    163,802    177,536 
Directors fees and expenses   111,000    110,000    200,068    220,000 
General and administrative   467,116    299,445    1,297,844    966,861 
Income tax expense (benefit)   (237,330)   (101,891)   (231,093)   (200,623)
Total operating expenses   21,549,361    14,154,832    40,222,454    24,857,742 
NET INVESTMENT INCOME   13,964,784    7,698,014    29,923,734    15,674,236 
                     
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS                    
Net realized gain (loss) from investments:                    
Non-control/Non-affiliate investments   
-
    7,943,838    90,691    8,106,347 
Net realized gain (loss) from investments   
-
    7,943,838    90,691    8,106,347 
Income tax (provision) benefit from realized gain on investments   
-
    
-
    
-
    69,250 
Net change in unrealized appreciation (depreciation) on investments:                    
Non-control/Non-affiliate investments   (11,657,451)   (13,878,470)   (13,385,585)   (14,512,759)
Affiliate investments   39,648    2,600,434    (205,636)   3,168,040 
Control investments   5,880,232    (1,980,420)   (8,468,657)   (11,247,186)
Net change in unrealized appreciation (depreciation) on investments   (5,737,571)   (13,258,456)   (22,059,878)   (22,591,905)
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   (221,206)   (230,154)   (161,799)   (592,105)
Net realized and unrealized gain (loss) on investments   (5,958,777)   (5,544,772)   (22,130,986)   (15,008,413)
Realized losses on extinguishment of debt   (110,056)   (1,204,809)   (110,056)   (1,204,809)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $7,895,951   $948,433   $7,682,692   $(538,986)
                     
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
  $0.65   $0.08   $0.64   $(0.04)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED
   12,158,440    11,963,276    12,011,180    12,037,855 

 

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,
2023		     August 31,
2022		  
INCREASE (DECREASE) FROM OPERATIONS:            
Net investment income   $ 29,923,734     $ 15,674,236  
Net realized gain from investments     90,691       8,106,347  
Realized losses on extinguishment of debt     (110,056 )     (1,204,809 )
Income tax (provision) benefit from realized gain on investments     -       69,250  
Net change in unrealized appreciation (depreciation) on investments     (22,059,878 )     (22,591,905 )
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments     (161,799 )     (592,105 )
Net increase (decrease) in net assets resulting from operations     7,682,692       (538,986 )
                 
DECREASE FROM SHAREHOLDER DISTRIBUTIONS:                
Total distributions to shareholders     (16,545,737 )     (12,798,798 )
Net decrease in net assets from shareholder distributions     (16,545,737 )     (12,798,798 )
                 
CAPITAL SHARE TRANSACTIONS:                
Proceeds from issuance of common stock (1)     22,498,117       -  
Capital contribution from manager     2,050,288       -  
Stock dividend distribution     1,808,157       2,196,868  
Repurchases of common stock     (2,157,605 )     (7,420,421 )
Repurchase fees     (1,772 )     (5,911 )
Offering costs     (213,427 )     -  
Net increase (decrease) in net assets from capital share transactions     23,983,758       (5,229,464 )
Total increase (decrease) in net assets     15,120,713       (18,567,248 )
Net assets at beginning of period     346,958,042       355,780,523  
Net assets at end of period   $ 362,078,755     $ 337,213,275  

 

(1)See Note 11 to the Consolidated Financial Statements contained herein for more information on share issuance.

 

See accompanying notes to consolidated financial statements.

  

3

 

  

Saratoga Investment Corp.

Consolidated Statements of Cash Flows

(unaudited)

  

   For the six months ended 
   August 31,
2023		   August 31,
2022		 
Operating activities        
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $7,682,692   $(538,986)
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   2,707,440    1,594,054 
Net accretion of discount on investments   (862,540)   (833,939)
Amortization of deferred debt financing costs   2,589,024    1,674,315 
Realized losses on extinguishment of debt   110,056    1,204,809 
Income tax expense (benefit)   (231,093)   (269,873)
Net realized (gain) loss from investments   (90,691)   (8,106,347)
Net change in unrealized (appreciation) depreciation on investments   22,059,878    22,591,905 
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   161,799    592,105 
Proceeds from sales and repayments of investments   17,103,496    105,173,099 
Purchases of investments   (167,272,090)   (257,515,083)
(Increase) decrease in operating assets:          
Interest receivable   127,723    73,870 
Due from affiliate   
-
    73,298 
Management fee receivable   (908)   (1,003)
Other assets   94,389    (465)
Current income tax receivable   336,875    64,638 
Increase (decrease) in operating liabilities:          
Base management and incentive fees payable   (2,945,019)   (3,417,662)
Accounts payable and accrued expenses   501,141    389,516 
Current tax payable   
-
    (2,820,036)
Interest and debt fees payable   (421,083)   271,856 
Directors fees payable   (14,932)   38,932 
Excise tax payable   
-
    (630,183)
Due to manager   367,663    (74,562)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES   (117,996,180)   (140,465,742)
           
Financing activities          
Borrowings on debt   46,500,000    79,500,000 
Paydowns on debt   (57,000,000)   (18,340,000)
Issuance of notes   77,500,000    105,500,000 
Repayments of notes   
-
    (43,125,000)
Payments of deferred debt financing costs   (4,085,214)   (5,087,947)
Discount on debt issuance, 6.00% notes 2027   
-
    (176,000)
Proceeds from issuance of common stock   22,498,117    
-
 
Capital contribution from manager   

2,050,288

    
-
 
Payments of cash dividends   (14,737,580)   (10,601,930)
Repurchases of common stock   (2,157,605)   (7,420,421)
Repurchases fees   (1,772)   (5,911)
Payments of offering costs   (213,427)   
-
 
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES   70,352,807    100,242,791 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS   (47,643,373)   (40,222,951)
CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, BEGINNING OF PERIOD   96,076,273    52,870,342 
CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, END OF PERIOD (See Note 2)  $48,432,900   $12,647,391 
           
Supplemental information:          
Interest paid during the period  $21,938,344   $12,691,530 
Cash paid for taxes   4,852    2,759,376 
Supplemental non-cash information:          
Payment-in-kind interest income and other adjustments to cost   (2,707,440)   (1,799,723)
Net accretion of discount on investments   862,540    833,939 
Amortization of deferred debt financing costs   2,589,024    1,674,315 
Stock dividend distribution   1,808,157    2,196,868 

 

See accompanying notes to consolidated financial statements.

 

4

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

August 31, 2023

(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 - 261.8% (b)                               
Altvia MidCo, LLC.  Alternative Investment Management Software 

First Lien Term Loan

(3M USD TERM SOFR+8.50%), 13.90% Cash, 7/18/2027

   7/18/2022   $7,940,000   $7,874,743   $7,851,072    2.2%
Altvia MidCo, LLC. (h)  Alternative Investment Management Software  Series A-1 Preferred Shares   7/18/2022    2,000,000    2,000,000    2,844,302    0.8%
      Total Alternative Investment Management Software             9,874,743    10,695,374    3.0%
BQE Software, Inc.  Architecture & Engineering Software 

First Lien Term Loan

(3M USD TERM SOFR+6.75%), 12.15% Cash, 4/13/2028

   4/13/2023   $24,500,000    24,255,000    24,255,000    6.7%
BQE Software, Inc. (j)  Architecture & Engineering Software 

Delayed Draw Term Loan

(3M USD TERM SOFR+6.75%), 12.15% Cash, 4/13/2028

   4/13/2023   $750,000    742,500    742,500    0.2%
      Total Architecture & Engineering Software             24,997,500    24,997,500    6.9%
GrowthZone, LLC  Association Management Software 

First Lien Term Loan

(3M USD TERM SOFR+8.25%), 13.65% Cash, 5/10/2028

   5/10/2023   $17,500,000    17,195,327    17,185,000    4.7%
Golden TopCo LP (h)  Association Management Software  Class A-2 Common Units   5/10/2023    1,000,000    1,000,000    1,000,000    0.3%
      Total Association Management Software             18,195,327    18,185,000    5.0%
Artemis Wax Corp. (d)(j)  Consumer Services 

Delayed Draw Term Loan

(1M USD TERM SOFR+6.75%), 12.08% Cash, 5/20/2026

   5/20/2021   $57,500,000    57,159,311    57,517,250    15.9%
Artemis Wax Corp. (h)  Consumer Services  Series B-1 Preferred Stock   5/20/2021    934,463    1,500,000    4,738,970    1.3%
Artemis Wax Corp. (h)  Consumer Services  Series D Preferred Stock   12/22/2022    278,769    1,500,000    1,622,086    0.4%
      Total Consumer Services             60,159,311    63,878,306    17.6%
Schoox, Inc. (h), (i)  Corporate Education Software  Series 1 Membership Interest   12/8/2020    1,050    475,698    4,181,695    1.2%
      Total Corporate Education Software             475,698    4,181,695    1.2%
GreyHeller LLC (h)  Cyber Security  Common Stock   11/10/2021    7,857,689    1,906,275    2,512,620    0.7%
      Total Cyber Security             1,906,275    2,512,620    0.7%
Gen4 Dental Partners Holdings, LLC (j)  Dental Practice Management 

Delayed Draw Term Loan

(3M USD TERM SOFR+10.18%), 15.73% Cash, 4/29/2026

   2/8/2023   $7,632,878    7,610,421    7,785,536    2.2%

 

5

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original
Acquisition
Date		   Principal/
Number of
Shares		   Cost   Fair
Value (c)		   % of
Net Assets		 
Gen4 Dental Partners Holdings, LLC (i)(h)  Dental Practice Management  Series A Preferred Units   2/8/2023    493,999    1,027,519    1,096,678    0.3%
New England Dental Partners  Dental Practice Management 

First Lien Term Loan

(3M USD TERM SOFR+8.00%), 13.55% Cash, 11/25/2025

   11/25/2020   $6,555,000    6,521,830    6,525,503    1.8%
New England Dental Partners  Dental Practice Management 

Delayed Draw Term Loan

(3M USD TERM SOFR+8.00%), 13.55% Cash, 11/25/2025

   11/25/2020   $4,650,000    4,632,430    4,629,075    1.3%
      Total Dental Practice Management             19,792,200    20,036,792    5.6%
Exigo, LLC (d)  Direct Selling Software 

First Lien Term Loan

(1M USD TERM SOFR+5.75%), 11.18% Cash, 3/16/2027

   3/16/2022   $24,437,500    24,275,643    24,088,044    6.7%
Exigo, LLC (j)  Direct Selling Software 

Delayed Draw Term Loan

(1M USD TERM SOFR+5.75%), 11.18% Cash, 3/16/2027

   3/16/2022   $-    -    (59,583)   0.0%
Exigo, LLC (j)  Direct Selling Software 

Revolving Credit Facility

(1M USD TERM SOFR+5.75%), 11.18% Cash, 3/16/2027

   3/16/2022   $-    -    (14,896)   0.0%
Exigo, LLC (h), (i)  Direct Selling Software  Common Units   3/16/2022    1,041,667    1,041,667    1,165,811    0.3%
      Total Direct Selling Software             25,317,310    25,179,376    7.0%
C2 Educational Systems, Inc. (d)(j)  Education Services 

First Lien Term Loan

(3M USD TERM SOFR+8.50%), 13.90% Cash, 5/31/2025

   5/31/2017   $21,500,000    21,471,737    21,536,550    5.9%
C2 Education Systems, Inc. (h)  Education Services  Series A-1 Preferred Stock   5/18/2021    3,127    499,904    618,837    0.2%
Zollege PBC  Education Services 

First Lien Term Loan

(3M USD TERM SOFR+7.00%), 14.40% Cash/2.00% PIK, 5/11/2026

   5/11/2021   $16,380,033    16,295,284    15,062,186    4.2%
Zollege PBC (j)  Education Services 

Delayed Draw Term Loan

(3M USD TERM SOFR+7.00%), 14.40% Cash/2.00% PIK, 5/11/2026

   5/11/2021   $937,443    931,036    864,603    0.2%
Zollege PBC (h)  Education Services  Class A Units   5/11/2021    250,000    250,000    93,175    0.0%
      Total Education Services             39,447,961    38,175,351    10.5%

 

6

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original
Acquisition
Date		   Principal/
Number of
Shares		   Cost   Fair
Value (c)		   % of
Net Assets		 
Destiny Solutions Inc. (h), (i)  Education Software  Limited Partner Interests   5/16/2018    3,068    3,969,291    9,462,554    2.6%
GoReact  Education Software 

First Lien Term Loan

(3M USD TERM SOFR+7.50%), 14.10% Cash/1.00% PIK, 1/17/2025

   1/17/2020   $8,047,007    8,006,292    8,036,546    2.2%
GoReact (j)  Education Software 

Delayed Draw Term Loan

(3M USD TERM SOFR+7.50%), 14.10% Cash/1.00% PIK, 1/17/2025

   1/18/2022   $1,260,935    1,260,935    1,259,296    0.3%
Identity Automation Systems (h)  Education Software  Common Stock Class A-2 Units   8/25/2014    232,616    232,616    301,167    0.1%
Identity Automation Systems (h)  Education Software  Common Stock Class A-1 Units   3/6/2020    43,715    171,571    226,219    0.1%
Ready Education  Education Software 

First Lien Term Loan

(3M USD TERM SOFR+6.00%), 11.40% Cash, 8/5/2027

   8/5/2022   $27,000,000    26,775,750    26,316,900    7.3%
      Total Education Software             40,416,455    45,602,682    12.6%
TG Pressure Washing Holdings, LLC (h)  Facilities Maintenance  Preferred Equity   8/12/2019    488,148    488,148    291,206    0.1%
      Total Facilities Maintenance             488,148    291,206    0.1%
Davisware, LLC  Field Service Management 

First Lien Term Loan

(3M USD TERM SOFR+7.00%), 12.40% Cash, 7/31/2024

   9/6/2019   $6,000,000    5,982,340    5,964,600    1.6%
Davisware, LLC (j)  Field Service Management 

Delayed Draw Term Loan

(3M USD TERM SOFR+7.00%), 12.40% Cash, 7/31/2024

   9/6/2019   $3,977,790    3,960,409    3,954,321    1.1%
      Total Field Service Management             9,942,749    9,918,921    2.7%
GDS Software Holdings, LLC  Financial Services 

First Lien Term Loan

(3M USD TERM SOFR+7.00%), 12.40% Cash, 12/30/2026

   12/30/2021   $22,713,926    22,611,867    22,377,760    6.2%
GDS Software Holdings, LLC  Financial Services 

Delayed Draw Term Loan

(3M USD TERM SOFR+7.00%), 12.40% Cash, 12/30/2026

   12/30/2021   $3,286,074    3,259,717    3,237,440    0.9%
GDS Software Holdings, LLC  (h)  Financial Services  Common Stock Class A Units   8/23/2018    250,000    250,000    528,107    0.1%
      Total Financial Services             26,121,584    26,143,307    7.2%
Ascend Software, LLC  Financial Services Software 

First Lien Term Loan

(3M USD TERM SOFR+7.50%), 13.16% Cash, 12/15/2026

   12/15/2021   $6,000,000    5,956,894    5,964,600    1.6%
Ascend Software, LLC (j)  Financial Services Software 

Delayed Draw Term Loan

(3M USD TERM SOFR+7.50%), 13.16% Cash, 12/15/2026

   12/15/2021   $4,050,000    4,016,094    4,026,105    1.1%
      Total Financial Services Software             9,972,988    9,990,705    2.7%
Inspect Point Holdings, LLC  Fire Inspection Business Software 

First Lien Term Loan

(1M USD TERM SOFR+6.50%), 11.83% Cash, 07/19/2028

   7/19/2023   $10,000,000    9,900,000    9,900,000    2.7%

 

7

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original
Acquisition
Date		   Principal/
Number of
Shares		   Cost   Fair
Value (c)		   % of
Net Assets		 
Inspect Point Holdings, LLC (j)  Fire Inspection Business Software 

First Lien Term Loan

(1M USD TERM SOFR+6.50%), 11.83% Cash, 07/19/2028

   7/19/2023   $-    -    -    0.0%
      Total Fire Inspection Business Software             9,900,000    9,900,000    2.7%
Stretch Zone Franchising, LLC  Health/Fitness Franchisor 

First Lien Term Loan

(3M USD TERM SOFR+7.00%), 12.40% Cash, 3/31/2028

   3/31/2023   $30,000,000    29,710,838    29,700,000    8.2%
Stretch Zone Franchising, LLC (j)  Health/Fitness Franchisor 

Delayed Draw Term Loan

(3M USD TERM SOFR+7.00%), 12.40% Cash, 3/31/2028

   3/31/2023   $-    -    -    0.0%
Stretch Zone Franchising, LLC (h)  Health/Fitness Franchisor  Class A Units   3/31/2023    20,000    2,000,000    2,000,000    0.6%
      Total Health/Fitness Franchisor             31,710,838    31,700,000    8.8%
Axiom Parent Holdings, LLC (h)  Healthcare Services  Class A Preferred Units   6/19/2018    400,000    400,000    1,105,987    0.3%
ComForCare Health Care (d)  Healthcare Services 

First Lien Term Loan

(3M USD TERM SOFR+6.25%), 11.65% Cash, 1/31/2025

   1/31/2017   $25,000,000    24,949,936    25,000,000    6.9%
      Total Healthcare Services             25,349,936    26,105,987    7.2%
HemaTerra Holding Company, LLC (d)  Healthcare Software 

First Lien Term Loan

(1M USD TERM SOFR+8.25%), 13.58% Cash, 1/31/2027

   4/15/2019   $55,205,828    54,856,742    55,167,183    15.2%
HemaTerra Holding Company, LLC  Healthcare Software 

Delayed Draw Term Loan

(1M USD TERM SOFR+8.25%), 13.58% Cash, 1/31/2027

   4/15/2019   $13,825,525    13,768,029    13,815,847    3.8%
TRC HemaTerra, LLC (h)  Healthcare Software  Class D Membership Interests   4/15/2019    2,487    2,816,693    4,902,746    1.4%
Procurement Partners, LLC  Healthcare Software 

First Lien Term Loan

(3M USD TERM SOFR+6.50%), 11.90% Cash, 5/12/2026

   11/12/2020   $35,125,000    34,939,652    35,135,538    9.7%
Procurement Partners, LLC (j)  Healthcare Software 

Delayed Draw Term Loan

(3M USD TERM SOFR+6.50%), 11.90% Cash, 5/12/2026

   11/12/2020   $10,300,000    10,222,017    10,303,090    2.8%
Procurement Partners Holdings LLC (h)  Healthcare Software  Class A Units   11/12/2020    571,219    571,219    783,511    0.2%
      Total Healthcare Software             117,174,352    120,107,915    33.1%
Roscoe Medical, Inc. (h)  Healthcare Supply  Common Stock   3/26/2014    5,081    508,077    -    0.0%
      Total Healthcare Supply             508,077    -    0.0%

 

8

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original
Acquisition
Date		   Principal/
Number of
Shares		   Cost   Fair
Value (c)		   % of
Net Assets		 
Book4Time, Inc. (a), (d)  Hospitality/Hotel 

First Lien Term Loan

(3M USD TERM SOFR+7.50%), 12.90%, 12/22/2025

   12/22/2020   $3,136,517    3,120,142    3,136,517    0.9%
Book4Time, Inc. (a)  Hospitality/Hotel 

Delayed Draw Term Loan

(3M USD TERM SOFR+7.50%), 12.90%, 12/22/2025

   12/22/2020   $2,000,000    1,987,041    2,000,000    0.6%
Book4Time, Inc. (a), (h), (i)  Hospitality/Hotel  Class A Preferred Shares   12/22/2020    200,000    156,826    353,429    0.1%
Knowland Group, LLC (h), (k)  Hospitality/Hotel 

Second Lien Term Loan

(3M USD TERM SOFR+8.00%), 16.55% Cash/3.00% PIK, 12/31/2024

   11/9/2018   $15,878,989    15,878,989    9,754,463    2.7%
Sceptre Hospitality Resources, LLC  Hospitality/Hotel 

First Lien Term Loan

(3M USD TERM SOFR+7.25%), 12.65% Cash, 11/15/2027

   4/27/2020   $23,000,000    22,813,986    22,889,600    6.3%
Sceptre Hospitality Resources, LLC (j)  Hospitality/Hotel 

Delayed Draw Term Loan

(3M USD TERM SOFR+7.25%), 12.65% Cash, 11/15/2027

   9/2/2021   $-    -    -    0.0%
      Total Hospitality/Hotel             43,956,984    38,134,009    10.6%
Granite Comfort, LP (d)  HVAC Services and Sales 

First Lien Term Loan

(3M USD TERM SOFR+7.82%), 13.22% Cash, 11/16/2025

   11/16/2020   $43,000,000    42,744,942    42,703,300    11.8%
Granite Comfort, LP (j)  HVAC Services and Sales 

Delayed Draw Term Loan

(3M USD TERM SOFR+7.82%), 13.22% Cash, 11/16/2025

   11/16/2020   $26,250,000    25,947,682    26,068,875    7.2%
      Total HVAC Services and Sales             68,692,624    68,772,175    19.0%
Vector Controls Holding Co., LLC (d)  Industrial Products 

First Lien Term Loan

(3M USD TERM SOFR+6.50%), 11.75% Cash, 3/6/2025

   3/6/2013   $1,907,586    1,907,586    1,907,586    0.5%
Vector Controls Holding Co., LLC (h)  Industrial Products  Warrants to Purchase Limited Liability Company Interests, Expires 11/30/2027   5/31/2015    343    -    6,660,427    1.8%
      Total Industrial Products             1,907,586    8,568,013    2.3%
AgencyBloc, LLC  Insurance Software 

First Lien Term Loan

(1M USD BSBY+8.00%), 13.38% Cash, 10/1/2026

   10/1/2021   $13,401,818    13,316,943    13,401,818    3.7%
Panther ParentCo LLC (h)  Insurance Software  Class A Units   10/1/2021    2,500,000    2,500,000    3,799,793    1.0%
      Total Insurance Software             15,816,943    17,201,611    4.7%
LogicMonitor, Inc. (d)  IT Services 

First Lien Term Loan

(3M USD TERM SOFR+6.50%), 11.90% Cash, 5/17/2026

   3/20/2020    $43,000,000    42,967,165    43,000,000     11.9 %
      Total IT Services             42,967,165    43,000,000    11.9%
ActiveProspect, Inc. (d)  Lead Management Software 

First Lien Term Loan

(3M USD TERM SOFR+6.00%), 11.60% Cash, 8/8/2027

   8/8/2022   $12,000,000    11,911,810    12,120,000    3.3%

 

9

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original
Acquisition
Date		   Principal/
Number of
Shares		   Cost   Fair
Value (c)		   % of
Net Assets		 
ActiveProspect, Inc. (j)  Lead Management Software 

Delayed Draw Term Loan

(3M USD TERM SOFR+6.00%), 11.60% Cash, 8/8/2027

   8/8/2022   $-    -    -    0.0%
      Total Lead Management Software             11,911,810    12,120,000    3.3%
Centerbase, LLC  Legal Software 

First Lien Term Loan

(1M USD TERM SOFR+7.75%), 13.08% Cash, 1/18/2027

   1/18/2022   $21,140,400    20,972,034    20,711,250    5.7%
      Total Legal Software             20,972,034    20,711,250    5.7%
Madison Logic, Inc. (d)  Marketing Orchestration Software 

First Lien Term Loan

(3M USD TERM SOFR+7.00%), 12.40% Cash, 12/30/2028

     12/10/2021    $18,952,500    18,615,176    18,588,612     5.1 %
      Total Marketing Orchestration Software             18,615,176    18,588,612    5.1%
ARC Health OpCo LLC (d)  Mental Healthcare Services 

First Lien Term Loan

(3M USD TERM SOFR+8.48%), 13.88% Cash, 8/5/2027

   8/5/2022   $6,500,000    6,431,969    6,538,350    1.8%
ARC Health OpCo LLC (d), (j)  Mental Healthcare Services 

Delayed Draw Term Loan

(3M USD TERM SOFR+8.48%), 13.88% Cash, 8/5/2027

   8/5/2022   $18,241,000    18,019,497    18,348,622    5.1%
ARC Health OpCo LLC (h)  Mental Healthcare Services  Class A Preferred Units   8/5/2022    3,818,400    4,169,599    4,238,424    1.2%
      Total Mental Healthcare Services             28,621,065    29,125,396    8.1%
Chronus LLC  Mentoring Software 

First Lien Term Loan

(3M USD TERM SOFR+5.25), 10.80% Cash, 8/26/2026

   8/26/2021   $15,000,000    14,901,460    14,821,500    4.1%
Chronus LLC  Mentoring Software 

First Lien Term Loan

(3M USD TERM SOFR+6.00), 11.55% Cash, 8/26/2026

   8/26/2021   $5,000,000    4,957,069    4,940,500    1.4%
Chronus LLC (h)  Mentoring Software  Series A Preferred Stock   8/26/2021    3,000    3,000,000    2,953,888    0.8%
      Total Mentoring Software             22,858,529    22,715,888    6.3%
Omatic Software, LLC  Non-profit Services 

First Lien Term Loan

(3M USD TERM SOFR+8.00%), 14.66% Cash/1.00% PIK, 6/30/2024

   5/29/2018   $14,194,333    14,166,229    14,285,177    3.9%
      Total Non-profit Services             14,166,229    14,285,177    3.9%
Emily Street Enterprises, L.L.C.  Office Supplies 

Senior Secured Note

(3M USD TERM SOFR+7.50%), 12.90% Cash, 12/31/2025

   12/28/2012   $6,000,000    5,989,877    6,000,000    1.7%
Emily Street Enterprises, L.L.C. (h)  Office Supplies  Warrant Membership Interests, Expires 12/31/2025   12/28/2012    49,318    400,000    866,521    0.2%
      Total Office Supplies             6,389,877    6,866,521    1.9%
Buildout, Inc. (d)  Real Estate Services 

First Lien Term Loan

(3M USD TERM SOFR+7.00%), 12.50% Cash, 7/9/2025

   7/9/2020   $14,000,000    13,935,536    13,813,800    3.8%
Buildout, Inc.  Real Estate Services 

Delayed Draw Term Loan

(3M USD TERM SOFR+7.00%), 12.50% Cash, 7/9/2025

   2/12/2021   $38,500,000    38,295,389    37,987,950    10.5%

 

10

 

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original
Acquisition
Date		   Principal/
Number of
Shares		   Cost   Fair
Value (c)		   % of
Net Assets		 
Buildout, Inc. (h), (i)  Real Estate Services  Limited Partner Interests   7/9/2020    1,250    1,372,557    1,459,433    0.4%
      Total Real Estate Services             53,603,482    53,261,183    14.7%
Wellspring Worldwide Inc.  Research Software 

First Lien Term Loan

(1M USD BSBY+7.25%), 12.63% Cash, 6/27/2027

   6/27/2022   $9,600,000    9,513,779    9,456,000    2.6%
Archimedes Parent LLC (h)  Research Software  Class A Common Units   6/27/2022    1,125,160    1,125,160    1,090,037    0.3%
      Total Research Software             10,638,939    10,546,037    2.9%
LFR Chicken LLC  Restaurant 

First Lien Term Loan

(1M USD TERM SOFR+7.00%), 12.33% Cash, 11/19/2026

   11/19/2021   $12,000,000    11,917,079    11,914,800    3.3%
LFR Chicken LLC (j)  Restaurant 

Delayed Draw Term Loan

(1M USD TERM SOFR+7.00%), 12.33% Cash, 11/19/2026

   11/19/2021   $9,000,000    8,937,166    8,936,100    2.5%
LFR Chicken LLC (h)  Restaurant  Series B Preferred Units   11/19/2021    497,183    1,000,000    1,234,926    0.3%
      Total Restaurant             21,854,245    22,085,826    6.1%
JobNimbus LLC  Roofing Contractor Software 

First Lien Term Loan

(1M USD TERM SOFR+8.75%), 14.18% Cash, 9/20/2026

   3/28/2023   $9,975,000    9,882,374    9,875,250    2.7%
      Total Roofing Contractor Software             9,882,374    9,875,250    2.7%
Pepper Palace, Inc. (d),(k)  Specialty Food Retailer 

First Lien Term Loan

(3M USD TERM SOFR+6.25%), 11.80% Cash, 6/30/2026

   6/30/2021   $33,320,000    33,111,625    7,940,156    2.2%
Pepper Palace, Inc. (j),(k)  Specialty Food Retailer 

Delayed Draw Term Loan

(3M USD TERM SOFR+6.25%), 11.80% Cash, 6/30/2026

   6/30/2021   $-    -    -    0.0%
Pepper Palace, Inc. (j),(k)  Specialty Food Retailer 

Revolving Credit Facility

(3M USD TERM SOFR+6.25%), 11.80% Cash, 6/30/2026

   6/30/2021   $-    -    -    0.0%
Pepper Palace, Inc. (h)  Specialty Food Retailer  Membership Interest (Series A)   6/30/2021    1,000,000    1,000,000    -    0.0%
Pepper Palace, Inc. (h)  Specialty Food Retailer  Membership Interest (Series B)   6/30/2021    197,035    197,035    -    0.0%
      Total Specialty Food Retailer             34,308,660    7,940,156    2.2%
ArbiterSports, LLC (d)  Sports Management 

First Lien Term Loan

(3M USD TERM SOFR+6.50%), 11.90% Cash, 2/21/2025

   2/21/2020   $26,000,000    25,922,927    25,841,400    7.1%
ArbiterSports, LLC  Sports Management 

Delayed Draw Term Loan

(3M USD TERM SOFR+6.50%), 11.90% Cash, 2/21/2025

   2/21/2020   $1,000,000    1,000,000    993,900    0.3%
      Total Sports Management             26,922,927    26,835,300    7.4%
Avionte Holdings, LLC (h)  Staffing Services  Class A Units   1/8/2014    100,000    100,000    2,111,229    0.6%
      Total Staffing Services             100,000    2,111,229    0.6%

 

11

 

 

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

First Lien Term Loan

(3M USD TERM SOFR+8.50%), 14.16% Cash, 5/2/2027

   5/2/2022   $6,000,000    5,950,936    6,102,000    1.7%
JDXpert (j)  Talent Acquisition Software 

Delayed Draw Term Loan

(3M USD TERM SOFR+8.50%), 14.16% Cash, 5/2/2027

   5/2/2022   $1,000,000    990,581    1,017,000    0.3%
Jobvite, Inc. (d)  Talent Acquisition Software 

First Lien Term Loan

(3M USD TERM SOFR+8.00%), 13.40% Cash, 8/5/2028

   8/5/2022   $20,000,000    19,872,450    19,964,000    5.7%
      Total Talent Acquisition Software             26,813,967    27,083,000    7.7%
VetnCare MSO, LLC (j)  Veterinary Services 

Delayed Draw Term Loan

(3M USD TERM SOFR+5.75%), 11.15% Cash, 5/12/2028

   5/12/2023   $500,000    495,295    495,000    0.1%
      Total Veterinary Services             495,295    495,000    0.1%
Sub Total Non-control/Non-affiliate investments             

953,247,363

    

947,924,370

    

261.8%

 
Affiliate investments - 12.9% (b)                               
ETU Holdings, Inc. (f)  Corporate Education Software 

First Lien Term Loan

(3M USD TERM SOFR+9.00%), 14.55% Cash, 8/18/2027

   8/18/2022   $7,000,000    6,940,505    6,960,800    1.9%
ETU Holdings, Inc. (f)  Corporate Education Software 

Second Lien Term Loan

15.00% PIK, 2/18/2028

   8/18/2022   $5,690,752    5,647,686    5,571,816    1.5%
ETU Holdings, Inc. (f), (h)  Corporate Education Software  Series A Preferred Units   8/18/2022    3,000,000    3,000,000    2,541,168    0.7%
      Total Corporate Education Software             15,588,191    15,073,784    4.1%
Modis Dental Partners OpCo, LLC (f)  Dental Practice Management 

First Lien Term Loan

(1M USD TERM SOFR+9.50%), 14.83% Cash, 4/18/2028

   4/18/2023   $7,000,000    6,898,754    6,895,000    1.9%
Modis Dental Partners OpCo, LLC (j)(f)  Dental Practice Management 

Delayed Draw Term Loan

(1M USD TERM SOFR+9.50%), 14.83% Cash, 4/18/2028

   4/18/2023   $-    -    -    0.0%
Modis Dental Partners OpCo, LLC (f)  Dental Practice Management  Class A Preferred Units   4/18/2023    1,950,000    1,950,000    1,950,000    0.5%
      Total Dental Practice Management             8,848,754    8,845,000    2.4%
Axero Holdings, LLC (f)  Employee Collaboration Software 

First Lien Term Loan

(3M USD TERM SOFR+8.00%), 13.55% Cash, 6/30/2026

   6/30/2021   $5,500,000    5,462,973    5,515,950    1.5%
Axero Holdings, LLC (f)  Employee Collaboration Software 

Delayed Draw Term Loan

(3M USD TERM SOFR+8.00%), 13.55% Cash, 6/30/2026

   6/30/2021   $1,100,000    1,091,537    1,103,190    0.3%
Axero Holdings, LLC (f), (j)  Employee Collaboration Software 

Revolving Credit Facility

(3M USD TERM SOFR+8.00%), 13.55% Cash, 6/30/2026

   2/3/2022   $-    -    -    0.0%

 

12

 

 

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), (h)  Employee Collaboration Software  Series A Preferred Units   6/30/2021    2,000,000    2,000,000    2,650,000    0.7%
Axero Holdings, LLC (f), (h)  Employee Collaboration Software  Series B Preferred Units   6/30/2021    2,000,000    2,000,000    4,185,000    1.2%
      Total Employee Collaboration Software             10,554,510    13,454,140    3.7%
Alpha Aesthetics Partners OpCo, LLC (f)  Healthcare Services 

First Lien Term Loan

(1M USD TERM SOFR+9.99%), 15.32% Cash, 3/20/2028

   3/20/2023   $3,900,000    3,843,657    3,841,500    1.2%
Alpha Aesthetics Partners OpCo, LLC (f)(j)  Healthcare Services 

Delayed Draw Term Loan

(1M USD TERM SOFR+9.99%), 15.32% Cash, 3/20/2028

   3/20/2023   $3,755,496    3,700,560    3,699,163    1.0%
Alpha Aesthetics Partners OpCo, LLC (h)(f)  Healthcare Services  Class A Preferred Units   3/20/2023    1,850,000    1,850,000    1,850,000    0.5%
      Total Healthcare Services             9,394,217    9,390,663    2.7%
Sub Total Affiliate investments             44,385,672    46,763,587    12.9%
Control investments - 28.9% (b)                            
Netreo Holdings, LLC (g)  IT Services 

First Lien Term Loan

(3M USD TERM SOFR +6.50%), 14.05% Cash/2.00% PIK 12/31/2025

   7/3/2018   $5,595,892    5,581,036    5,499,083    1.5%
Netreo Holdings, LLC (d), (g)  IT Services 

Delayed Draw Term Loan

(3M USD TERM SOFR +6.50%), 14.05% Cash/2.00% PIK, 12/31/2025

   5/26/2020   $22,337,997    22,255,700    21,951,549    6.1%
Netreo Holdings, LLC (g), (h)  IT Services  Common Stock Class A Units   7/3/2018    4,600,677    8,344,500    13,804,373    3.8%
      Total IT Services             36,181,236    41,255,005    11.4%
Saratoga Investment Corp. CLO 2013-1, Ltd. (a), (e), (g)  Structured Finance Securities 

Other/Structured Finance Securities

0.00%, 4/20/2033

   1/22/2008   $111,000,000    25,119,531    15,207,152    4.2%
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-2-R-3
Note (a), (g)		  Structured Finance Securities