Saratoga Investment Corp. Announces Fiscal First Quarter 2027 Financial Results
Rhea-AI Summary
Saratoga Investment (NYSE:SAR) reported fiscal Q1 2027 results for the period ended May 31, 2026. Assets under management grew 1.6% sequentially to $1.126 billion on approximately $31 million of net originations, while NAV fell to $378.5 million and NAV per share to $23.23.
Total investment income was $30.8 million and adjusted NII was $7.6 million, or $0.47 per share. Earnings per share were $(0.42). The company declared base monthly dividends totaling $0.75 per share for fiscal Q2 2027, implying a 14.0% yield at a $21.42 share price.
Positive
- AUM increased 1.6% QoQ to $1.126 billion and 16.3% YoY
- Net originations of about $31 million, including two new portfolio companies
- LTM ROE of 4.0% versus 2.4% BDC industry average, per management
- Adjusted NII of $7.6 million, or $0.47 per share, in Q1 2027
- Quarter-end cash position rose to $60.8 million
- Base monthly dividends of $0.25 per share, or $0.75 for Q2 2027, a 14.0% yield at $21.42
- Non-accruals at 0.0% of fair value and 1.2% of cost
- 98.3% of credits rated in highest internal category; 81.7% in first lien debt
Negative
- NAV declined $17.9 million YoY and $17.7 million QoQ to $378.5 million
- NAV per share fell 4.9% QoQ to $23.23 and from $25.52 YoY
- EPS of $(0.42) versus $(0.16) last quarter and $0.91 last year
- Adjusted NII down 25.1% YoY and 11.0% QoQ to $7.6 million
- Portfolio marked down $15.2 million, including $18.3 million non-CLO core depreciation
- Pepper Palace written down to zero; Exigo and Chronus show performance deterioration
- LTM ROE declined to 4.0% from 9.3% a year earlier; quarterly annualized ROE (7.1)%
News Market Reaction – SAR
In the Jul 8 session, SAR declined 14.09%, reflecting a significant negative market reaction. Argus tracked a trough of -13.5% from its starting point during tracking. Our momentum scanner triggered 23 alerts that day, indicating elevated trading interest and price volatility. Trading volume was exceptionally heavy at 10.3x the daily average, suggesting significant selling pressure.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 05 | Year-end results | Positive | -3.1% | Strong FY2026 growth in AUM, NAV and ROE with portfolio markdowns. |
| Jan 07 | Q3 earnings | Positive | +1.6% | Q3 2026 NAV and NII per share growth with high ROE and originations. |
| Oct 07 | Q2 earnings | Positive | -4.7% | Q2 2026 NAV gains, solid ROE and higher AUM with strong capacity. |
| Jul 08 | Q1 earnings | Positive | -2.9% | Q1 2026 jump in adjusted NII per share and higher NAV and AUM. |
| May 07 | Year-end results | Positive | -7.9% | FY2025 NAV growth, steady income and dividends with lower AUM and strong credit. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Recent earnings reports have often been followed by share-price declines despite generally solid operating metrics.
Key Terms
net asset value financial
non-accrual financial
first lien term loans financial
sofr financial
sbic debentures financial
gross unlevered irr financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Reports Quarterly Asset Growth of
Non-Accruals Decreased to
NEW YORK, July 07, 2026 (GLOBE NEWSWIRE) -- Saratoga Investment Corp. (NYSE: SAR) (“Saratoga Investment” or “the Company”), a business development company (“BDC”), today announced financial results for its fiscal first quarter 2027 ended May 31, 2026.
Summary Financial Information
The Company’s summarized financial information is as follows:
| For the three months ended and as of | |||
| ($ in thousands, except per share) | May 31, 2026 | February 28, 2026 | May 31, 2025 |
| Assets Under Management (AUM) | 1,126,334 | 1,109,134 | 968,318 |
| Net Asset Value (NAV) | 378,455 | 396,156 | 396,369 |
| NAV per share | 23.23 | 24.42 | 25.52 |
| Total Investment Income | 30,777 | 31,123 | 32,319 |
| Net Investment Income (NII) per share | 0.47 | 0.48 | 0.66 |
| Adjusted NII per share | 0.47 | 0.53 | 0.66 |
| Earnings per share | (0.42) | (0.16) | 0.91 |
| Dividends per share (record date) | 0.75 | 1.00* | 0.75 |
| Return on Equity – last twelve months | |||
| – annualized quarter | ( | ( | |
| Originations | 79,151 | 135,139 | 50,086 |
| Repayments | 48,415 | 34,020 | 64,330 |
* Actual dividend of
Christian L. Oberbeck, Chairman and Chief Executive Officer of Saratoga Investment, commented, “In a quarter defined by sector-wide pressure across private credit, Saratoga's last twelve months return on equity of
“Continuing our track record of strong dividend distributions, we recently announced a base monthly dividend of
“During the quarter, deal activity remained robust reflecting the impact of our recent business development efforts, despite persistent sector headwinds and the cautious sentiment that has taken hold across the broader private credit sector. Market dynamics continued to be very competitive. While our portfolio saw multiple debt repayments in Q1, our origination activity more than offset those exits, resulting in net originations of
“Saratoga’s overall performance is reflected in our key performance indicators this past quarter and year, including: (i) LTM ROE of
“Sequential quarter NAV per share is down by
“Our total
“During the quarter, our core BDC net interest margin increased from
“Our quarter-end cash position increased from
“Our overall credit quality remained solid this quarter, with
Mr. Oberbeck concluded, “As we progress through fiscal year 2027, the macroeconomic environment remains complex, shaped by geopolitical tensions, elevated inflation, and continued concerns about AI and software. These dynamics, combined with an uncertain interest rate environment, have driven a measurable rise in default rates and broad valuation pressure across the sector, with industry NAVs declining and a number of BDCs reducing their dividends this past quarter. This quarter’s credit related NAV decline, discussed above, reflects credit specific situations and does not appear indicative of a broader trend in our portfolio. The recent wave of BDC bond issuance, the rebound in higher-quality loan values, and improving M&A activity point to a market that appears to be improving and differentiating among managers, and we are confident that our disciplined, senior secured, first-lien focused underwriting and conservative balance sheet position Saratoga to navigate this environment and continue delivering durable, risk-adjusted returns to our shareholders over the long term.”
Discussion of Financial Results for the Quarter ended May 31, 2026:
- AUM at fair value as of May 31, 2026 was
$1.126 billion , an increase of1.6% from$1.109 billion as of February 28, 2026, and an increase of16.3% from$968.3 million as of May 31, 2025. - Total investment income for the three months ended May 31, 2026, was
$30.8 million , a decrease of$1.5 million , or4.8% , from$32.3 million for the quarter ended May 31, 2025, and a decrease of$0.3 million , or1.1% , as compared to$31.1 million for the quarter ended February 28, 2026. This quarter’s investment income decrease, as compared to prior quarters, was primarily due to lower interest earned on the period’s cash balances in addition to lower interest earned on deployed capital than in prior quarters, partially offset by interest income derived from increased AUM. Investment income reflects a weighted average interest rate on the core BDC portfolio of10.5% , down from10.4% as of February 28, 2026 and11.5% as of May 31, 2025, with the yield reduction primarily reflecting SOFR base rate decreases over the past year, but also indicative of recent tight spreads experienced on new originations versus historically higher spreads on repaid assets. - Total expenses for the quarter ended May 31, 2026, excluding interest and debt financing expenses, base management fees and incentive fees, and income and excise taxes, were
$2.7 million , a decrease of$0.1 million compared to$2.8 million for the quarter ended May 31, 2025, and an increase of$0.3 million as compared to$2.4 million for the quarter ended February 28, 2026. This represented0.9% of average total assets on an annualized basis, up from0.8% both last quarter and last year. - Adjusted NII for the quarter ended May 31, 2026, was
$7.6 million , a decrease of$2.5 million , or25.1% , from$10.1 million in the quarter ended May 31, 2025, and a decrease of$0.9 million , or11.0% from$8.5 million in the quarter ended February 28, 2026. The decrease from comparable quarters, in addition to the abovementioned interest income and operating expense changes, primarily reflects the full-period impact of the additional interest expense on the$50 million 7.25% private bond and the$100 million 7.5% public baby bond that was issued last quarter used to repay the$175 million 4.375% institutional bond at the end of February 2026. - NII Yield as a percentage of average net asset value for the quarter ended May 31, 2026, was
7.8% . Adjusted NII Yield was also7.8% , as compared to adjusted NII Yield of10.3% last year, and8.4% last quarter. - NAV was
$378.5 million as of May 31, 2026, a decrease of$17.9 million from$396.4 million as of May 31, 2025, and a decrease of$17.7 million from$396.2 million as of February 28, 2026. - NAV per share was
$23.23 as of May 31, 2026, compared to$24.42 as of February 28, 2026, and$25.52 as of May 31, 2025. - Return on equity (“ROE”) for the last twelve months ended May 31, 2026, was
4.0% , down from9.3% for the comparable period last year, and down from9.1% for the twelve months ended February 28, 2026. ROE on an annualized basis for the quarter ended May 31, 2026 was (7.1)%. - The weighted average common shares outstanding for the quarter ended May 31, 2026 was 16.3 million, up from 16.2 million shares last quarter and increasing from 15.3 million for the quarter ended May 31, 2025.
Portfolio and Investment Activity for the Quarter Ended May 31, 2026
- Fair value of Saratoga Investment’s portfolio was
$1.126 billion , excluding$60.8 million in cash and cash equivalents, principally invested in 50 portfolio companies, one collateralized loan obligation fund (the “CLO”), one joint venture fund (the “JV”), and 30 distinct BB and BBB CLO debt investments. - Cost of investments made during the quarter ended May 31, 2026 were
$79.2 million , including two investments in new portfolio companies and ten follow-on investments. - Principal repayments during the quarter ended May 31, 2026, were
$48.4 million , including one full debt repayment, four partial repayments, plus amortization.- For the quarter ended May 31, 2026, the fair value of the portfolio decreased by
$15.0 million of net realized gains and unrealized depreciation, consisting of (i) net unrealized depreciation of$18.3 million in the Non-CLO core portfolio (ii) net unrealized appreciation of$3.2 million in the JV and BB/BBB CLO debt portfolio, and (iii) net realized gains of$0.2 million , consisting of the receipt of an escrow payment on Netreo generating$0.6m realized gains, partially offset by the write-off of TG Pressure Washing’s equity of$0.5 million . - The
$18.3 million unrealized depreciation in the non-CLO core portfolio consists of three different components:- In addition to Pepper Palace that was written down to zero, there are primarily two other assets that showed signs of performance deterioration this quarter, being Exigo and Chronus, with all performance assets combined representing
$9.9 million , or54% of the above write-down, - There was also a market adjustment to comparable market multiples for many of our industries, and these have been reflected in the equity valuations of a group of assets in our portfolio that had been trading at a premium to cost and post-markdown still remain above or close to cost. This mark-down totals approx.
$6.0 million , or33% of the total write-down, and - The remaining
13% of the overall portfolio mark-down relates to the impact of recent market spreads on our valuations.
- In addition to Pepper Palace that was written down to zero, there are primarily two other assets that showed signs of performance deterioration this quarter, being Exigo and Chronus, with all performance assets combined representing
- For the quarter ended May 31, 2026, the fair value of the portfolio decreased by
-
- Since taking over management of the BDC in 2010, the Company has generated
$1.37 billion of repayments and sales of investments originated by Saratoga Investment, generating a gross unlevered IRR of14.9% . Total investments originated by Saratoga are$2.60 billion in 132 portfolio companies.
- Since taking over management of the BDC in 2010, the Company has generated
- The overall portfolio composition consisted of
81.7% of first lien term loans,3.8% of second lien term loans,1.4% of unsecured loans,5.9% of structured finance securities, and7.2% of common equity. - The weighted average current yield on Saratoga Investment’s portfolio based on current fair values was
9.8% , which was comprised of a weighted average current yield of10.5% on first lien term loans,11.9% on second lien term loans,11.2% on unsecured loans,11.0% on structured finance securities and0.0% on equity interests.
Liquidity and Capital Resources
Outstanding Borrowings:
- On April 10, 2026, we issued
$25.0 million in aggregate principal amount of7.25% fixed-rate notes due 2029 (the “7.25% 2029 Notes”) for net proceeds of approximately$24.5 million , based on an offering price of98.00% per Note. Estimated offering costs incurred were approximately$0.2 million . Interest on the7.25% 2029 Notes is paid quarterly on February 28, May 31, August 31 and November 30 of each year, with the first payment made on May 31, 2026. The Notes will mature on April 10, 2029, and may be extended to October 10, 2029, at Saratoga Investment’s sole discretion. The Notes may be redeemed at our option, in whole or in part at any time, or from time to time on or after April 10, 2027, at the redemption price of par, plus accrued and unpaid interest. Pursuant to the terms of the Notes Purchase Agreement, upon the mutual agreement of both parties, we may issue additional Notes for sale in subsequent offerings up to a maximum of$25.0 million by July 10, 2026. - As of May 31, 2026 Saratoga Investment had
$817.4 million of borrowings outstanding, including$32.5 million under its$85.0 million senior secured revolving Valley Credit Facility and$37.5 million under its$75.0 million senior secured revolving Live Oak Credit Facility. - In addition, Saratoga Investment had
$84.0 million of SBA debentures in its SBIC II license outstanding,$129.0 million of SBA debentures in its SBIC III license outstanding,$369.4 million of listed baby bonds issued,$75.0 million of unsecured unlisted institutional bond issuances, four unlisted private issuances of$90.0 million in total, and an aggregate of$60.8 million in cash and cash equivalents.
Undrawn Borrowing Capacity:
- With
$90.0 million available under the two credit facilities and$60.8 million of cash and cash equivalents as of May 31, 2026, Saratoga Investment has a total of$150.8 million of undrawn credit facility borrowing capacity and cash and cash equivalents to be used for new investments or to support existing portfolio companies in the BDC and the SBIC. - In addition, Saratoga Investment has
$46.0 million in undrawn SBA debentures available from its existing SBIC III license. And in May 2026, legislation amending the Small Business Investment Act of 1958 increased the individual SBIC leverage limit from$175.0 million to$250.0 million , and the maximum leverage available for two or more SBICs under common control from$350.0 million to$475.0 million , in each case subject to SBA approvals. - Availability under the Valley National Bank and Live Oak credit facilities can change depending on portfolio company performance and valuation. In addition, certain follow-on investments in SBIC II and the BDC will not qualify for SBIC III funding.
- Total Saratoga Investment undrawn borrowing capacity is therefore
$196.8 million as of May 31, 2026. - As of May 31, 2026, Saratoga Investment had
$120.1 million of committed undrawn lending commitments and$65.1 million of discretionary funding commitments.
Additionally:
- Saratoga Investment has an active equity distribution agreement with Ladenburg Thalmann & Co. Inc., Raymond James and Associates, Inc, Lucid Capital Markets, LLC and Compass Point Research and Trading, LLC, through which the Company may offer for sale, from time to time, up to
$300.0 million of common stock through an ATM offering.- As of May 31, 2026, Saratoga Investment has sold 8,591,915 shares for gross proceeds of
$227.2 million at an average price of$26.42 for aggregate net proceeds of$225.4 million (net of transaction costs). - During the three months ended May 31, 2026, Saratoga Investment did not sell any shares through its ATM Program.
- As of May 31, 2026, Saratoga Investment has sold 8,591,915 shares for gross proceeds of
Dividend
On June 11, 2026, Saratoga Investment announced that its Board of Directors declared a base quarterly dividend of
| Month | Amount Per Share | Record Date | Payment Date | |||
| June 2026 | July 6, 2026 | July 23, 2026 | ||||
| July 2026 | August 5, 2026 | August 25, 2026 | ||||
| August 2026 | September 3, 2026 | September 23, 2026 | ||||
Shareholders have the option to receive payment of dividends in cash or receive shares of common stock, pursuant to the Company’s DRIP. Shares issued under the Company’s DRIP are issued at a
The following table highlights Saratoga Investment’s monthly dividend distribution for fiscal 2027 and annual distribution over the past four years:
| Period (Fiscal Year ends Feb) | Base Dividend Per Share | Special Dividend Per Share | Total Dividend Per Share | |||
| Fiscal Q2 2027 (August 2026) | - | |||||
| Fiscal Q2 2027 (July 2026) | - | |||||
| Fiscal Q2 2027 (June 2026) | - | |||||
| Fiscal Q1 2027 (May 2026) | - | |||||
| Fiscal Q1 2027 (April 2026) | - | |||||
| Fiscal Q1 2027 (March 2026) | - | |||||
| Total Declared in Fiscal 2027 YTD | $1.50 | - | $1.50 | |||
| Full Year Fiscal 2026 | $3.00 | $0.25 | $3.25 | |||
| Full Year Fiscal 2025 | $2.96 | $0.35 | $3.31 | |||
| Full Year Fiscal 2024 | $2.86 | - | $2.86 | |||
| Full Year Fiscal 2023 | $2.44 | - | $2.44 | |||
Share Repurchase Plan
As of May 31, 2026, the Company purchased 1,037,698 shares of common stock, at the average price of
Previously, in fiscal year 2015, the Company announced the approval of an open market share repurchase plan (the “Share Repurchase Plan”) that allows it to repurchase up to 200,000 shares of its common stock at prices below its NAV as reported in its then most recently published financial statements. Since then, the Share Repurchase Plan has been extended annually, and the Company has periodically increased the amount of shares of common stock that may be purchased under the Share Repurchase Plan, most recently to 1.7 million shares of common stock. On January 6, 2026, its Board of Directors extended the Share Repurchase Plan for another year to January 15, 2027.
Fiscal First Quarter 2027 Conference Call/Webcast Information
| When: | Wednesday, July 8, 2026 |
| 10:00 a.m. Eastern Time (ET) | |
| How: | Webcast: Interested parties may access a live webcast of the call and find the Q1 2027 presentation by going to the “Events & Presentations” section of Saratoga Investment’s investor relations website https://ir.saratogainvestmentcorp.com. A replay of the webcast will also be available for a limited time at Events & Presentations page. |
| Call: | To access the call by phone, please go to this link Registration Link and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time |
About Saratoga Investment Corp.
Saratoga Investment is a specialty finance company that provides customized financing solutions to U.S. middle-market businesses. The Company invests primarily in senior and unitranche leveraged loans and mezzanine debt, and, to a lesser extent, equity to provide financing for change of ownership transactions, strategic acquisitions, recapitalizations and growth initiatives in partnership with business owners, management teams and financial sponsors. Saratoga Investment’s objective is to create attractive risk-adjusted returns by generating current income and long-term capital appreciation from its debt and equity investments. Saratoga Investment has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, and is externally managed by Saratoga Investment Advisors, LLC, an SEC-registered investment advisor focusing on credit-driven strategies. Saratoga Investment Corp. owns two active SBIC-licensed subsidiaries, having surrendered its first license after repaying all debentures for that fund following the end of its investment period and subsequent wind-down. Furthermore, it manages a
Forward Looking Statements
This press release contains historical information and forward-looking statements with respect to the business and investments of the Company, including, but not limited to, the statements about future events or our future performance or financial condition. Forward-looking statements can be identified by the use of forward looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or negative versions of those words, other comparable words or other statements that do not relate to historical or factual matters. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including, but not limited to: changes in the markets in which we invest; changes in the financial, capital, and lending markets; an economic downturn or a recession and its impact on the ability of our portfolio companies to operate and the investment opportunities available to us; the impact of interest rate volatility on our business and our portfolio companies; the uncertainty associated with the imposition of tariffs and trade barriers and changes in trade policy and its impact on our portfolio companies and the global economy; the impact of supply chain constraints and labor shortages on our portfolio companies; and the elevated levels of inflation and its impact on our portfolio companies and the industries in which we invests, as well as those described from time to time in our filings with the Securities and Exchange Commission.
Any forward-looking statement speaks only as of the date on which it is made. The Company undertakes no duty to update any forward-looking statements made herein or on the webcast/conference call, whether as a result of new information, future developments or otherwise, except as required by law. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2026 and subsequent filings, including the “Risk Factors” sections therein, with the Securities and Exchange Commission for a more complete discussion of the risks and other factors that could affect any forward-looking statements.
Contacts:
Saratoga Investment Corporation
535 Madison Avenue, 4th Floor
New York, NY 10022
Henri Steenkamp
Chief Financial Officer
Saratoga Investment Corp.
212-906-7800
Lena Cati
The Equity Group Inc.
212-836-9611
Val Ferraro
The Equity Group Inc.
212-836-9633
Financials
| Saratoga Investment Corp. | |||||||
| Consolidated Statements of Assets and Liabilities | |||||||
| May 31, 2026 | February 28, 2026 | ||||||
| ASSETS | |||||||
| Investments at fair value | |||||||
| Non-control/Non-affiliate investments (amortized cost of | $ | 1,034,744,952 | $ | 1,016,247,566 | |||
| Affiliate investments (amortized cost of | 50,325,404 | 52,710,911 | |||||
| Control investments (amortized cost of | 41,263,586 | 40,175,335 | |||||
| Total investments at fair value (amortized cost of | 1,126,333,942 | 1,109,133,812 | |||||
| Cash and cash equivalents | 46,140,915 | 1,680,070 | |||||
| Cash and cash equivalents, reserve accounts | 14,667,902 | 20,105,683 | |||||
| Interest receivable (net of reserve of | 9,048,860 | 7,314,053 | |||||
| Management fee receivable | 232,837 | 249,720 | |||||
| Other assets | 999,726 | 781,766 | |||||
| Total assets | $ | 1,197,424,182 | $ | 1,139,265,104 | |||
| LIABILITIES | |||||||
| Revolving credit facilities | $ | 70,000,000 | $ | 70,000,000 | |||
| Deferred debt financing costs, revolving credit facilities | (1,453,760 | ) | (1,670,816 | ) | |||
| SBA debentures payable | 213,000,000 | 160,000,000 | |||||
| Deferred debt financing costs, SBA debentures payable | (4,997,638 | ) | (3,888,087 | ) | |||
| 75,000,000 | 75,000,000 | ||||||
| Discount on | (74,697 | ) | (108,898 | ) | |||
| Deferred debt financing costs, | (257,587 | ) | (344,393 | ) | |||
| 15,000,000 | 15,000,000 | ||||||
| Deferred debt financing costs, | (112,867 | ) | (130,839 | ) | |||
| 105,500,000 | 105,500,000 | ||||||
| Discount on | (38,226 | ) | (48,361 | ) | |||
| Deferred debt financing costs, | (647,257 | ) | (823,774 | ) | |||
| 46,000,000 | 46,000,000 | ||||||
| Deferred debt financing costs, | (493,059 | ) | (580,514 | ) | |||
| 60,375,000 | 60,375,000 | ||||||
| Deferred debt financing costs, | (646,196 | ) | (748,873 | ) | |||
| 57,500,000 | 57,500,000 | ||||||
| Deferred debt financing costs, | (763,667 | ) | (866,230 | ) | |||
| 25,000,000 | - | ||||||
| Discount on | (480,024 | ) | - | ||||
| Deferred debt financing costs, | (71,445 | ) | - | ||||
| 50,000,000 | 50,000,000 | ||||||
| Discount on | (417,283 | ) | (435,318 | ) | |||
| Deferred debt financing costs, | (830,833 | ) | (775,165 | ) | |||
| 100,000,000 | 100,000,000 | ||||||
| Deferred debt financing costs, | (3,351,883 | ) | (3,298,905 | ) | |||
| Base management and incentive fees payable | 6,862,113 | 6,602,819 | |||||
| Deferred tax liability | 4,027,990 | 4,579,522 | |||||
| Accounts payable and accrued expenses | 1,334,109 | 1,771,915 | |||||
| Interest and debt fees payable | 3,405,852 | 3,904,143 | |||||
| Directors fees payable | - | 5,500 | |||||
| Due to Manager | 600,582 | 590,624 | |||||
| Total liabilities | 818,969,224 | 743,109,350 | |||||
| Commitments and contingencies (See Note 9) | |||||||
| NET ASSETS | |||||||
| Common stock, par value | |||||||
| authorized, 16,289,025 and 16,224,198 common shares issued and outstanding, respectively | 16,289 | 16,224 | |||||
| Capital in excess of par value | 440,588,956 | 439,202,477 | |||||
| Total distributable deficit | (62,150,287 | ) | (43,062,947 | ) | |||
| Total net assets | 378,454,958 | 396,155,754 | |||||
| Total liabilities and net assets | $ | 1,197,424,182 | $ | 1,139,265,104 | |||
| NET ASSET VALUE PER SHARE | $ | 23.23 | $ | 24.42 | |||
| Asset Coverage Ratio | 162.6 | % | 168.4 | % | |||
| Saratoga Investment Corp. | |||||||
| Consolidated Statements of Operations | |||||||
| (unaudited) | |||||||
| For the three months ended | |||||||
| May 31, 2026 | May 31, 2025 | ||||||
| INVESTMENT INCOME | |||||||
| Interest from investments | |||||||
| Interest income: | |||||||
| Non-control/Non-affiliate investments | $ | 26,005,778 | $ | 25,464,663 | |||
| Affiliate investments | 726,094 | 595,624 | |||||
| Control investments | 686,716 | 1,190,661 | |||||
| Payment in kind interest income: | |||||||
| Non-control/Non-affiliate investments | 173,291 | 168,229 | |||||
| Affiliate investments | 503,610 | 584,749 | |||||
| Control investments | 19,586 | - | |||||
| Total interest from investments | 28,115,075 | 28,003,926 | |||||
| Interest from cash and cash equivalents | 554,386 | 2,027,211 | |||||
| Management fee income | 544,988 | 705,175 | |||||
| Dividend income: | |||||||
| Non-control/Non-affiliate investments | - | 562,183 | |||||
| Control investments | 778,852 | 436,418 | |||||
| Total dividend from investments | 778,852 | 998,601 | |||||
| Structuring and advisory fee income | 656,363 | 264,375 | |||||
| Other income | 127,261 | 319,329 | |||||
| Total investment income | 30,776,925 | 32,318,617 | |||||
| OPERATING EXPENSES | |||||||
| Interest and debt financing expenses | 13,650,283 | 12,451,865 | |||||
| Base management fees | 4,970,053 | 4,333,332 | |||||
| Incentive management fees expense (benefit) | 1,892,061 | 2,536,513 | |||||
| Professional fees | 531,236 | 699,200 | |||||
| Administrator expenses | 1,350,000 | 1,250,000 | |||||
| Insurance | 80,598 | 74,310 | |||||
| Directors fees and expenses | 126,000 | 131,500 | |||||
| General and administrative | 600,266 | 645,411 | |||||
| Income tax expense (benefit) | (16,559 | ) | 54,454 | ||||
| Total operating expenses | 23,183,938 | 22,176,585 | |||||
| NET INVESTMENT INCOME | 7,592,987 | 10,142,032 | |||||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | |||||||
| Net realized gain (loss) from investments: | |||||||
| Non-control/Non-affiliate investments | (488,148 | ) | 2,262,984 | ||||
| Control investments | 638,355 | 638,355 | |||||
| Net realized gain (loss) from investments | 150,207 | 2,901,339 | |||||
| Net change in unrealized appreciation (depreciation) on investments: | |||||||
| Non-control/Non-affiliate investments | (11,927,184 | ) | 372,148 | ||||
| Affiliate investments | (2,418,612 | ) | (45,944 | ) | |||
| Control investments | (831,335 | ) | 617,773 | ||||
| Net change in unrealized appreciation (depreciation) on investments | (15,177,131 | ) | 943,977 | ||||
| Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | 530,824 | (55,085 | ) | ||||
| Net realized and unrealized gain (loss) on investments | (14,496,100 | ) | 3,790,231 | ||||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (6,903,113 | ) | $ | 13,932,263 | ||
| WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE | $ | (0.42 | ) | $ | 0.91 | ||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 16,252,548 | 15,344,510 | |||||
Supplemental Information Regarding Adjusted Net Investment Income, Adjusted Net Investment Income Yield and Adjusted Net Investment Income per Share
On a supplemental basis, Saratoga Investment provides information relating to adjusted net investment income, adjusted net investment income yield and adjusted net investment income per share, which are non-GAAP measures. These measures are provided in addition to, but not as a substitute for, net investment income, net investment income yield and net investment income per share, respectively. These non-GAAP measures should only be used to evaluate the Company’s results of operations in conjunction with their corresponding GAAP measures. Adjusted net investment income represents net investment income excluding any capital gains incentive fee expense or reversal attributable to realized and unrealized gains. The management agreement with the Company’s advisor provides that a capital gains incentive fee is determined and paid annually with respect to cumulative realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized losses for such year. In addition, Saratoga Investment accrues, but does not pay, a capital gains incentive fee in connection with any unrealized capital appreciation, as appropriate. All capital gains incentive fees are presented within net investment income within the Consolidated Statements of Operations, but the associated realized and unrealized gains and losses that these incentive fees relate to, are excluded. As such, Saratoga Investment believes that adjusted net investment income, adjusted net investment income yield and adjusted net investment income per share is a useful indicator of operations exclusive of any capital gains incentive fee expense or reversal attributable to gains. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Pursuant to the requirements of Item 10(e) of Regulation S-K, the following table provides a reconciliation of net investment income to adjusted net investment income, net investment income yield to adjusted net investment income yield and net investment income per share to adjusted net investment income per share for the three months ended May 31, 2026 and 2025.
| For the Three Months Ended | ||||||||
| May 31, 2026 | May 31, 2025 | |||||||
| Net Investment Income | $ | 7,592,987 | $ | 10,142,032 | ||||
| Changes in accrued capital gains incentive fee expense/ (reversal) | - | - | ||||||
| Adjusted net investment income | $ | 7,592,987 | $ | 10,142,032 | ||||
| Net investment income yield | 7.8 | % | 10.3 | % | ||||
| Changes in accrued capital gains incentive fee expense/ (reversal) | - | - | ||||||
| Adjusted net investment income yield (1) | 7.8 | % | 10.3 | % | ||||
| Net investment income per share | $ | 0.47 | $ | 0.66 | ||||
| Changes in accrued capital gains incentive fee expense/ (reversal) | - | - | ||||||
| Adjusted net investment income per share (2) | $ | 0.47 | $ | 0.66 | ||||
(1) Adjusted net investment income yield is calculated as adjusted net investment income divided by average net asset value.
(2) Adjusted net investment income per share is calculated as adjusted net investment income divided by weighted average common shares outstanding.
