Quarterly Report for Quarter Ending August 31, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, the following discussion and other parts of this Quarterly Report contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by such forward-looking information due to the factors discussed under "Note about Forward-Looking Statements" and Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended February 28, 2025.

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 beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or are within our control. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements.

The forward-looking statements contained in this Quarterly Report on Form 10-Q involve risks and uncertainties, including statements as to:

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our future operating results;

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the introduction, withdrawal, success and timing of business initiatives and strategies;

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changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in the value of our assets;

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the relative and absolute investment performance and operations of our Manager;

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the impact of increased competition;

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our ability to turn potential investment opportunities into transactions and thereafter into completed and successful investments;

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the unfavorable resolution of any future legal proceedings;

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our business prospects and the operational and financial performance of our portfolio companies, including their ability to achieve our respective objectives as a result of the current economic conditions caused by, among other things, elevated levels of inflation, and uncertainty relating to the interest rate environment, and the effects of the disruptions caused thereby on our ability to continue to effectively manage our business;

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interest rate volatility, including the uncertainty relating to the interest rate environment, could adversely affect our results, particularly if we elect to use leverage as part of our investment strategy;

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the impact of investments that we expect to make and future acquisitions and divestitures;

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our contractual arrangements and relationships with third parties;

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the dependence of our future success on the general economy and its impact on the industries in which we invest;

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the ability of our portfolio companies to achieve their objectives;

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our expected financings and investments;

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our regulatory structure and tax treatment, including our ability to operate as a business development company ("BDC"), or to operate our small business investment company ("SBIC") subsidiaries, and to continue to qualify to be taxed as a regulated investment company ("RIC");

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the adequacy of our cash resources and working capital;

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the timing of cash flows, if any, from the operations of our portfolio companies;

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the impact of supply chain constraints and labor difficulties on our portfolio companies and the global economy;

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the elevated level of inflation, and its impact on our portfolio companies and on the industries in which we invest;

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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;

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the impact of geopolitical conditions on our portfolio companies and on the industries in which we invest;

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the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to us or our Manager;

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the impact of changes to tax legislation and, generally, our tax position;

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our ability to access capital and any future financings by us;

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the ability of our Manager to attract and retain highly talented professionals; and

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the ability of our Manager to locate suitable investments for us and to monitor and effectively administer our investments.

Such forward-looking statements may include statements preceded by, followed by or that otherwise include terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "project," "should," "will" and "would" or the negative of these terms or other comparable terminology.

We have based the forward-looking statements included in this Quarterly Report on Form 10-Q on information available to us on the date of this Quarterly Report on Form 10-Q, and we assume no obligation to update any such forward-looking statements. Actual results could differ materially from those anticipated in our forward-looking statements, and future results could differ materially from historical performance. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law or SEC rule or regulation. You are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the U.S. Securities and Exchange Commission (the "SEC"), including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

The following analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes thereto contained elsewhere in this Quarterly Report on Form 10-Q.

OVERVIEW

We are a Maryland corporation that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the "1940 Act"). Our investment objective is to create attractive risk-adjusted returns by generating current income and long-term capital appreciation from our investments. We invest primarily in senior and unitranche leveraged loans and mezzanine debt issued by private U.S. middle-market companies, which we define as companies having earnings before interest, tax, depreciation and amortization ("EBITDA") of between $2 million and $50 million, both through direct lending and through participation in loan syndicates. We may also invest up to 30.0% of the portfolio in opportunistic investments in order to seek to enhance returns to stockholders. Such investments may include investments in distressed debt, which may include securities of companies in bankruptcy, foreign debt, private equity, securities of public companies that are not thinly traded and structured finance vehicles such as collateralized loan obligation funds. Although we have no current intention to do so, to the extent we invest in private equity funds, we will limit our investments in entities that are excluded from the definition of "investment company" under Section 3(c)(1) or Section 3(c)(7) of the 1940 Act, which includes private equity funds, to no more than 15.0% of our net assets. We have elected and qualified to be treated as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code").

Corporate History

We commenced operations, at the time known as GSC Investment Corp., on March 23, 2007 and completed an initial public offering of shares of common stock on March 28, 2007. Prior to July 30, 2010, we were externally managed and advised by GSCP (NJ), L.P., an entity affiliated with GSC Group, Inc. In connection with the consummation of a recapitalization transaction on July 30, 2010, as described below we engaged Saratoga Investment Advisors to replace GSCP (NJ), L.P. as our investment adviser and changed our name to Saratoga Investment Corp.

Our wholly owned subsidiaries, Saratoga Investment Corp. SBIC II LP ("SBIC II LP") and Saratoga Investment Corp. SBIC III LP ("SBIC III LP", and together with SBIC II LP, the "SBIC Subsidiaries"), received SBIC licenses from the SBA on August 14, 2019 and September 29, 2022, respectively. Each of the SBIC Subsidiaries provides up to $175.0 million in long-term capital in the form of debentures guaranteed by the SBA. With all debentures repaid to the SBA, SBIC LP's ("SBIC LP") license was surrendered on January 3, 2024, providing the Company access to all undistributed capital of SBIC LP, and SBIC LP subsequently merged with and into the Company. Under current SBIC regulations, for two or more SBICs under common control, the maximum amount of outstanding SBA debentures cannot exceed $350.0 million with at least $175.0 million in combined regulatory capital.

On June 10, 2024, we completed the fifth refinancing of the Saratoga CLO. This refinancing, among other things, did not extend the Saratoga CLO reinvestment period nor extend its legal maturity, while adjusting the interest rate of two of the existing Notes. The Issuer issued $422.5 million of notes (the "2013-1 2024 Reset CLO Notes"), consisting of Class A-1-R-4 and Class A-2-R-4. The 2013-1 2024 Reset CLO Notes were issued pursuant to the Indenture with the same Trustee. Proceeds of the issuance of the 2013-1 2024 Reset CLO Notes were used along with existing assets of the Saratoga CLO to redeem the existing Class A-1-R-3 and Class A-2-R-3 Notes. No other Notes were refinanced as part of this refinancing. The Saratoga CLO paid $0.5 million of transaction costs related to the refinancing.

We have formed a wholly owned special purpose entity, Saratoga Investment Funding II LLC, a Delaware limited liability company ("SIF II"), for the purpose of entering into a senior secured revolving credit facility with Encina Lender Finance, LLC ("Encina"), supported by loans held by SIF II and pledged to Encina under the credit facility (the "Encina Credit Facility). The Encina Credit Facility closed on October 4, 2021. During the first two years following the closing date, SIF II may request an increase in the commitment amount under the Encina Credit Facility to up to $75.0 million. The terms of the Encina Credit Facility require a minimum drawn amount of $12.5 million at all times during the first six months following the closing date, which increases to the greater of $25.0 million or 50% of the commitment amount in effect at any time thereafter. The term of the Encina Credit Facility is three years. Advances under the Encina Credit Facility bear interest at a floating rate per annum equal to LIBOR plus 4.0%, with LIBOR having a floor of 0.75%, with customary provisions related to our and Encina's selection of a replacement benchmark rate. Concurrently with the closing of the Encina Credit Facility, all remaining amounts outstanding on our existing revolving credit facility with Madison Capital Funding, LLC were repaid and the facility was terminated. On January 27, 2023, among other things, the borrowings available under the Encina Credit Facility was increased from up to $50.0 million to up to $65.0 million, the underlying benchmark rate used to compute interest changed from LIBOR to Term SOFR for one-month tenor plus a 0.10% credit spread adjustment; the applicable effective margin rate on borrowings increased from 4.00% to 4.25% and the maturity date was extended from October 4, 2024 to January 27, 2026.

We have formed a wholly owned special purpose entity, Saratoga Investment Funding III LLC, a Delaware limited liability company ("SIF III"), for the purpose of entering into a $50.0 million senior secured revolving credit facility with Live Oak Banking Company ("Live Oak"), supported by loans held by SIF III and pledged to Live Oak under the credit facility (the "Live Oak Credit Facility). The Live Oak Credit Facility closed on March 27, 2024. During the first two years following the closing date, SIF III may request an increase in the commitment amount under the Live Oak Credit Facility to up to $150.0 million. The terms of the Live Oak Credit Facility required a minimum drawn amount of $12.5 million at all times during the period ended March 27, 2025, which increased to the greater of $25.0 million or 50% of the facility amount in effect at any time thereafter. The term of the Live Oak Credit Facility is three years. Advances under the Live Oak Credit Facility bear interest at a floating rate per annum equal to Adjusted Term SOFR plus an applicable margin between 3.50% and 4.25% based on the Live Oak Credit Facility's utilization. On June 14, 2024, the Live Oak Credit Facility was amended to, among other things: (i) increase the borrowings available under the Live Oak Credit Facility from up to $50.0 million to up to $75.0 million, subject to a borrowing base requirement; (ii) add new lenders to the Live Oak Credit Agreement; (iii) replace administrative agent approval with "Required Lender" (as defined in the Live Oak Credit Agreement) approval with respect to certain matters; (iv) replace Required Lender approval with 100% lender approval with respect to certain matters; and (v) change the definition of Required Lender to require the approval of at least two unaffiliated lenders.

On October 26, 2021, we entered into a Limited Liability Company Agreement with TJHA JV I LLC ("TJHA") to co-manage Saratoga Senior Loan Fund I JV LLC ("SLF JV"). SLF JV is invested in Saratoga Investment Corp Senior Loan Fund 2021-1 Ltd ("SLF 2021"), which is a wholly owned subsidiary of SLF JV. SLF 2021 was formed for the purpose of making investments in a diversified portfolio of broadly syndicated first lien and second lien term loans or bonds in the primary and secondary markets.

On September 30, 2022, SLF 2021 was renamed to Saratoga Investment Corp Senior Loan Fund 2022-1, Ltd. ("SLF 2022").

We and TJHA have equal voting interest on all material decisions with respect to SLF JV, including those involving its investment portfolio, and equal control of corporate governance. No management fee is charged to SLF JV as control and management of SLF JV is shared equally.

We and TJHA have committed to provide up to a combined $50.0 million of financing to SLF JV through cash contributions, where we provided $43.75 million and TJHA provided $6.25 million, resulting in an 87.5% and 12.5% ownership between the two parties. The financing is issued in the form of an unsecured note and equity. The unsecured note will pay a fixed-rate of 10.0% per annum and is due and payable in full on October 20, 2033. As of August 31, 2025, our and TJHA's investment in SLF JV consisted of an unsecured note of $17.6 million and $2.5 million, respectively; and membership interest of $17.6 million and $2.5 million, respectively. As of February 28, 2025, our and TJHA's investment in SLF JV consisted of an unsecured note of $17.6 million and $2.5 million, respectively; and membership interest of $17.6 million and $2.5 million, respectively. As of August 31, 2025 and February 28, 2025, our investment in the unsecured note of SLF JV had a fair value of $16.8 million and $16.5 million, respectively, and our investment in the membership interests of SLF JV had a fair value of $2.9 million and $3.1 million, respectively.

SLF JV's initial investment in SLF 2022 was in the form of an unsecured loan. The unsecured loan paid a floating rate of LIBOR plus 7.00% per annum and was paid in full on June 9, 2023. The unsecured loan was repaid in full on October 28, 2022, as part of the CLO closing.

We have determined that SLF JV is an investment company under ("FASB") Accounting Standards Codification ("ASC") Topic 946, Financial Services-Investment Companies ("ASC 946"); however, in accordance with such guidance we will generally not consolidate our investment in a company other than a wholly owned investment company subsidiary. SLF JV is not a wholly owned investment company subsidiary as we and TJHA each have an equal 50% voting interest in SLF JV and thus neither party has a controlling financial interest. Furthermore, FASB ASC Topic 810, Consolidation ("ASC 810"), concludes that in a joint venture where both members have equal decision-making authority, it is not appropriate for one member to consolidate the joint venture since neither has control. Accordingly, we do not consolidate SLF JV.

On October 28, 2022, SLF 2022 issued $402.1 million of debt through the JV CLO trust. The 2022 JV CLO Notes were issued pursuant to the JV Indenture, with the Trustee. As part of the transaction, we purchased 87.50% of the Class E Notes from SLF 2022 with a par value of $12.25 million. As of August 31, 2025 and February 28, 2025, the fair value of these Class E Notes were $12.3 million and $12.3 million, respectively.

Critical Accounting Policies and Estimates

Basis of Presentation

The preparation of financial statements in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") requires management to make certain estimates and assumptions affecting amounts reported in our consolidated financial statements. We have identified investment valuation, revenue recognition and the recognition of capital gains incentive fee expense as our most critical accounting estimates. We continuously evaluate our estimates, including those related to the matters described below. These estimates are based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from those estimates under different assumptions or conditions. A discussion of our critical accounting policies and estimates follows.

Investment Valuation

We account for investments at fair value in accordance with the FASB ASC Topic 820, Fair Value Measurement ("ASC 820"). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. Under ASC 820 we are required to assume that its investments are to be sold or its liabilities are to be transferred at the balance sheet date in the principal market to independent market participants, or in the absence of a principal market, in the most advantageous market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.

Investments for which market quotations are readily available are fair valued at such market quotations obtained from independent third-party pricing services and market makers subject to any decision by our board of directors to approve a fair value determination to reflect significant events affecting the value of these investments. We value investments for which market quotations are not readily available at fair value as approved, in good faith, by our board of directors based on input from Saratoga Investment Advisors (the "Manager" or "Saratoga Investment Advisors"), the audit committee of our board of directors and a third-party independent valuation firm. We use multiple techniques for determining fair value based on the nature of the investment and experience with those types of investments and specific portfolio companies. The selections of the valuation techniques and the inputs and assumptions used within those techniques often require subjective judgements and estimates. These techniques include market comparables, discounted cash flows and enterprise value waterfalls. Fair value is best expressed as a range of values from which we determine a single best estimate. The types of inputs and assumptions that may be considered in determining the range of values of our investments include the nature and realizable value of any collateral, the portfolio company's ability to make payments, market yield trend analysis and volatility in future interest rates, call and put features, the markets in which the portfolio company does business, comparison to publicly traded companies, discounted cash flows and other relevant factors.

We undertake a multi-step valuation process each quarter when valuing investments for which market quotations are not readily available, as described below:

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each investment is initially valued by the responsible investment professionals of Saratoga Investment Advisors and preliminary valuation conclusions are documented and discussed with our senior management; and

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an independent valuation firm engaged by our board of directors independently reviews a selection of these preliminary valuations each quarter so that the valuation of each investment for which market quotes are not readily available is reviewed by the independent valuation firm at least once each fiscal year. We use a third-party independent valuation firm to value our investment in the subordinated notes of Saratoga CLO and the Class F-2-R-3 Notes tranche of the Saratoga CLO every quarter.

In addition, all our investments are subject to the following valuation process:

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the audit committee of our board of directors reviews and approves each preliminary valuation and Saratoga Investment Advisors and an independent valuation firm (if applicable) will supplement the preliminary valuation to reflect any comments provided by the audit committee; and

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our board of directors discusses the valuations and approves the fair value of each investment, in good faith, based on the input of Saratoga Investment Advisors, independent valuation firm (to the extent applicable) and the audit committee of our board of directors.

Our investment in Saratoga CLO is carried at fair value, which is based on a discounted cash flows that utilizes prepayment, re-investment and loss assumptions based on historical experience and projected performance, economic factors, the characteristics of the underlying cash flow, and market comparables for equity interests in collateralized loan obligation funds similar to Saratoga CLO, when available, as determined by Saratoga Investment Advisors and recommended to our board of directors. Specifically, we use Intex cash flows, or an appropriate substitute, to form the basis for the valuation of our investment in Saratoga CLO. The cash flows use a set of inputs including projected default rates, recovery rates, reinvestment rates and prepayment rates in order to arrive at estimated valuations. The inputs are based on available market data and projections provided by third parties as well as management estimates. We use the output from the Intex models (i.e., the estimated cash flows) to perform a discounted cash flow analysis on expected future cash flows to determine a valuation for our investment in Saratoga CLO.

Our investments in CLO BB and CLO BBB debt have been valued using recent actual market trades or an independent pricing service. The valuation methodology of the independent pricing service includes incorporating data comprised of observable market transactions, executable bids, broker quotes from dealers with two sided markets, as well as transaction activity from comparable securities to those being valued. As the independent pricing service contemplates real-time market data and no unobservable inputs or significant judgment has been used by the Manager in the valuation of the Company's investments in CLO BB and CLO BBB debt, such positions are considered level II assets.

Rule 2a-5 under the 1940 Act ("Rule 2a-5") establishes a regulatory framework for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits boards, subject to board oversight and certain other conditions, to designate the investment adviser to perform fair value determinations. Rule 2a-5 also defines when market quotations are "readily available" for purposes of the 1940 Act and the threshold for determining whether a fund must determine the fair value of a security. Rule 31a-4 under the 1940 Act ("Rule 31a-4") provides the recordkeeping requirements associated with fair value determinations. While our board of directors has not elected to designate Saratoga Investment Advisors as the valuation designee, we have adopted certain revisions to its valuation policies and procedures in order comply with the applicable requirements of Rule 2a-5 and Rule 31a-4.

Revenue Recognition

Income Recognition

Purchases and sales of investments and the related realized gains or losses are recorded on a trade-date basis. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis to the extent that such amounts are expected to be collected. We stop accruing interest on our investments when it is determined that interest is no longer collectible. Discounts and premiums on investments purchased are accreted/amortized over the life of the respective investment using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion of discounts and amortization of premiums on investments.

Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reserved when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as a reduction in principal depending upon management's judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current, although we may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection.

Payment-in-Kind Interest

We hold debt and preferred equity investments in our portfolio that contain a payment-in-kind ("PIK") interest provision. The PIK interest, which represents contractually deferred interest added to the investment balance that is generally due at maturity, is generally recorded on an accrual basis to the extent such amounts are expected to be collected. We stop accruing PIK interest if we do not expect the issuer to be able to pay all principal and interest when due.

Revenues

We generate revenue in the form of interest income and capital gains on the debt investments that we hold and capital gains, if any, on equity interests that we may acquire. We expect our debt investments, whether in the form of leveraged loans or mezzanine debt, to have terms of up to ten years, and to bear interest at either a fixed or floating rate. Interest on debt will be payable generally either quarterly or semi-annually. In some cases, our debt or preferred equity investments may provide for a portion or all of the interest to be PIK. To the extent interest is PIK, it will be payable through the increase of the principal amount of the obligation by the amount of interest due on the then-outstanding aggregate principal amount of such obligation. The principal amount of the debt and any accrued but unpaid interest will generally become due at the maturity date. In addition, we may generate revenue in the form of commitment, origination, structuring, amendment, redemption or diligence fees, fees for providing managerial assistance or investment management services and possibly consulting fees. Any such fees will be generated in connection with our investments and recognized as earned. We may also invest in preferred equity or common equity securities that pay dividends on a current basis.

On January 22, 2008, we entered into a collateral management agreement with Saratoga CLO, pursuant to which we act as its collateral manager. The Saratoga CLO was refinanced in October 2013 and November 2016 with its reinvestment period extended to October 2016 and October 2018, respectively.

On December 14, 2018, we completed a third refinancing and upsize of the Saratoga CLO. The third Saratoga CLO refinancing, among other things, extended its reinvestment period to January 2021, and extended its legal maturity date to January 2030, and added a non-call period of January 2020. Following this refinancing, the Saratoga CLO portfolio increased its aggregate principal amount from approximately $300.0 million to approximately $500.0 million of predominantly senior secured first lien term loans. In addition to refinancing its liabilities, we invested an additional $13.8 million in all of the newly issued subordinated notes of the Saratoga CLO and also purchased $2.5 million in aggregate principal amount of the Class F-R-2 and $7.5 million aggregate principal amount of the Class G-R-2 notes tranches at par, with a coupon of 3M USD LIBOR plus 8.75% and 3M USD LIBOR plus 10.00%, respectively. As part of this refinancing, we also redeemed our existing $4.5 million aggregate amount of the Class F notes tranche at par and the $20.0 million CLO 2013-1 Warehouse Loan was repaid.

On February 11, 2020, we entered into an unsecured loan agreement ("CLO 2013-1 Warehouse 2 Loan") with Saratoga Investment Corp. CLO 2013-1 Warehouse 2, Ltd ("CLO 2013-1 Warehouse 2"), a wholly owned subsidiary of Saratoga CLO, which was fully repaid during the fourth quarter ended February 28, 2021.

On February 26, 2021, we completed the fourth refinancing of the Saratoga CLO. This refinancing, among other things, extended the Saratoga CLO reinvestment period to April 2024, extended its legal maturity to April 2033, and added a non-call period of February 2022. In addition, and as part of the refinancing, the Saratoga CLO was upsized from $500 million in assets to approximately $650 million. As part of this refinancing and upsizing, we invested an additional $14.0 million in all of the newly issued subordinated notes of the Saratoga CLO, and purchased $17.9 million in aggregate principal amount of the Class F-R-3 Notes tranche at par. Concurrently with the fourth refinancing of the Saratoga CLO, the existing $2.5 million of Class F-R-2 Notes, $7.5 million of Class G-R-2 Notes and $25.0 million of the CLO 2013-1 Warehouse 2 Loan were repaid. We also paid $2.6 million of transaction costs related to the refinancing and upsizing on behalf of the Saratoga CLO, to be reimbursed from future equity distributions. At August 31, 2021, the outstanding receivable of $2.6 million was repaid in full.

On August 9, 2021, we exchanged our existing $17.9 million Class F-R-3 Notes for $8.5 million Class F-1-R-3 Notes and $9.4 million Class F-2-R-3 Notes at par. On August 11, 2021, we sold our Class F-1-R-3 Notes to third parties, resulting in a realized loss of $0.1 million.

On June 10, 2024, we completed our fifth refinancing of the Saratoga CLO, which adjusted the interest rate of two of the existing Notes. Saratoga CLO issued $422.5 million notes (the "2013-1 2024 Reset CLO Notes"), consisting of Class A-1-R-4 and Class A-2-R-4. The 2013-1 2024 Reset CLO Notes were issued pursuant to the indenture with the same trustee. Proceeds of the issuance of the 2013-1 2024 Reset CLO Notes were used along with existing assets of the Saratoga CLO to redeem the existing Class A-1-R-3 and Class A-2-R-3 Notes. No other Notes were refinanced as part of this refinancing. The Saratoga CLO paid $0.5 million of transaction costs related to the refinancing.

The Saratoga CLO remains effectively 100% owned and managed by Saratoga Investment Corp. We receive a base management fee of 0.10% per annum and a subordinated management fee of 0.40% per annum of the outstanding principal amount of Saratoga CLO's assets, paid quarterly to the extent of available proceeds.

Following the third refinancing and the issuance of the 2013-1 Reset CLO Notes on December 14, 2018, we are no longer entitled to an incentive management fee equal to 20.0% of excess cash flow to the extent the Saratoga CLO subordinated notes receive an internal rate of return paid in cash equal to or greater than 12.0%.

Interest income on our investment in Saratoga CLO is recorded using the effective interest method in accordance with the provisions of FASB ASC Topic 325-40, Investments-Other, Beneficial Interests in Securitized Financial Assets, based on the anticipated yield and the estimated cash flows over the projected life of the investment. Yields are revised when there are changes in actual or estimated cash flows due to changes in prepayments and/or re-investments, credit losses or asset pricing. Changes in estimated yield are recognized as an adjustment to the estimated yield over the remaining life of the investment from the date the estimated yield was changed.

On October 26, 2021, we and TJHA entered into the LLC Agreement to co-manage SLF JV. SLF JV is invested in Saratoga Investment Corp Senior Loan Fund 2022-1, Ltd ("SLF 2021"), which is a wholly owned subsidiary of SLF JV. SLF 2021 was formed for the purpose of making investments in a diversified portfolio of broadly syndicated first lien and second lien term loans or bonds in the primary and secondary markets.

We and TJHA have equal voting interest on all material decisions with respect to SLF JV, including those involving its investment portfolio, and equal control of corporate governance. No management fee is charged to SLF JV as control and management of SLF JV is shared equally.

We and TJHA have committed to provide up to a combined $50.0 million of financing to SLF JV through cash contributions, with us providing $43.75 million and TJHA providing $6.25 million, resulting in 87.5% and 12.5% ownership between the two parties. The financing is issued in the form of an unsecured note and equity. The unsecured note pays a fixed-rate of 10% per annum and is due and payable in full on October 20, 2033.

We record interest income from its investment in an unsecured loan with SLF JV on an accrual basis and records dividend income from its membership interest when earned. All operating decisions are shared with a 50% voting interest in SLF JV

Expenses

Our primary operating expenses include the payment of investment advisory and management fees, professional fees, directors and officers insurance, fees paid to directors who are not "interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of the Company ("independent directors") and administrator expenses, including our allocable portion of our administrator's overhead. Our investment advisory and management fees compensate our Manager for its work in identifying, evaluating, negotiating, closing and monitoring our investments. We bear all other costs and expenses of our operations and transactions, including those relating to:

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organization;

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calculating our net asset value ("NAV") (including the cost and expenses of any independent valuation firm);

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expenses incurred by our Manager payable to third parties, including agents, consultants or other advisers, in monitoring our financial and legal affairs and in monitoring our investments and performing due diligence on our prospective portfolio companies;

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expenses incurred by our Manager payable for travel and due diligence on our prospective portfolio companies;

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interest payable on debt, if any, incurred to finance our investments;

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offerings of our common stock and other securities;

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investment advisory and management fees;

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fees payable to third parties, including agents, consultants or other advisers, relating to, or associated with, evaluating and making investments;

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transfer agent and custodial fees;

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federal and state registration fees;

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all costs of registration and listing our common stock on any securities exchange;

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U.S. federal, state and local taxes;

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independent directors fees and expenses;

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costs of preparing and filing reports or other documents required by governmental bodies (including the SEC and the SBA);

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costs of any reports, proxy statements or other notices to common stockholders including printing costs;

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our fidelity bond, directors and officers errors and omissions liability insurance, and any other insurance premiums;

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direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs; and

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administration fees and all other expenses incurred by us or, if applicable, the administrator in connection with administering our business (including payments under the Administration Agreement based upon our allocable portion of the administrator's overhead in performing its obligations under an Administration Agreement, including rent and the allocable portion of the cost of our officers and their respective staffs (including travel expenses)).

The terms of the investment advisory and management agreement with Saratoga Investment Advisors, our current investment adviser, are substantially similar to the terms of the investment advisory and management agreement we had entered into with GSCP (NJ), L.P., our former investment adviser, except for the following material distinctions in the fee terms:

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The capital gains portion of the incentive fee was reset with respect to gains and losses from May 31, 2010, and therefore losses and gains incurred prior to such time will not be taken into account when calculating the capital gains fee payable to Saratoga Investment Advisors and, as a result, Saratoga Investment Advisors will be entitled to 20.0% of net gains that arise after May 31, 2010. In addition, the cost basis for computing realized gains and losses on investments held by us as of May 31, 2010 equal the fair value of such investment as of such date. Under the investment advisory and management agreement with our former investment adviser, GSCP (NJ), L.P., the capital gains fee was calculated from March 21, 2007, and the gains were substantially outweighed by losses.

●

Under the "catch up" provision, 100.0% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income that exceeds 1.875% but is less than or equal to 2.344% in any fiscal quarter is payable to Saratoga Investment Advisors. This will enable Saratoga Investment Advisors to receive 20.0% of all net investment income as such amount approaches 2.344% in any quarter, and Saratoga Investment Advisors will receive 20.0% of any additional net investment income. Under the investment advisory and management agreement with our former investment adviser, GSCP (NJ), L.P. only received 20.0% of the excess net investment income over 1.875%.

●

We will no longer have deferral rights regarding incentive fees in the event that the distributions to stockholders and change in net assets is less than 7.5% for the preceding four fiscal quarters.

Capital Gains Incentive Fee

We record an expense accrual relating to the capital gains incentive fee payable by us to the Manager when the unrealized gains on its investments exceed all realized capital losses on its investments given the fact that a capital gains incentive fee would be owed to the Manager if we were to liquidate our investment portfolio at such time. The actual incentive fee payable to our Manager related to capital gains will be determined and payable in arrears at the end of each fiscal year and will include only realized capital gains for the period.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires additional disaggregated information on income taxes paid. This amended guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted, however the Company has not elected to early adopt this provision as of the date of the financial statements contained in this report. The Company is currently evaluating the impact of the new guidance on the Company's consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires additional disclosure of the nature of expenses included in the income statement in response to requests from investors for more information about an entity's expenses. The new standard requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The new guidance is effective for annual periods beginning after December 15, 2026, and interim periods within the annual reporting periods beginning after December 15, 2027. Early adoption permitted. We are currently evaluating the impact of the new standard on our consolidated financial statements and related disclosures and do not believe it will have a material impact on its consolidated financial statements or its disclosures.

Portfolio and Investment Activity

Investment Portfolio Overview
		August 31, 2025				February 28, 2025
		($ in millions)
Number of investments(1)			101				135
Number of portfolio companies(2)			44				48
Average investment per portfolio company(2)		$	20.6			$	20.1
Average investment size(1)		$	9.2			$	7.2
Weighted average maturity(3)			2.4 yrs				2.2 yrs
Number of industries (5)			39				41
Non-performing or delinquent investments (fair value)		$	1.8			$	2.6
Fixed rate debt (% of interest earning portfolio)(3)		$	9.8(1.2	)%		$	26.1(3.0	)%
Fixed rate debt (weighted average current coupon)(3)			8.3	%			7.4	%
Floating rate debt (% of interest earning portfolio)(3)		$	836.5(98.8	)%		$	850.5(97.0	)%
Floating rate debt (weighted average current spread over SOFR)(3)(4)			6.9	%			7.2	%

(1)	Excludes our investment in the subordinated notes of Saratoga CLO, and our investments in BBB and BB CLO Debt.
(2)	Excludes our investment in the subordinated notes of Saratoga CLO and Class F-2-R-3 Notes tranche, as well as the unsecured notes and equity interests in the SLF JV, the Class E Note tranche of the SLF 2022 and our investments in BB and BBB CLO debt.
(3)	Excludes our investment in the subordinated notes of Saratoga CLO and equity interests, as well as the unsecured notes and equity interests in SLF JV, the Class E Note tranche of the SLF 2022 and our investments in BB and BBB CLO debt.
(4)	Calculation uses either 1-month or 3-month SOFR, depending on the contractual terms, and after factoring in any existing SOFR floors.
(5)	Our investment in the subordinated notes of Saratoga CLO and Class F-R-3 Note tranche, the unsecured notes and equity interests in the SLF JV, the Class E Note tranche of the SLF 2022 and the BB and BBB CLO debt securities are included in Structured Finance Securities industry.

During the three months ended August 31, 2025, we invested $52.2 million in new and existing portfolio companies and had $29.8 million in aggregate amount of exits and repayments resulting in net investments of $22.4 million for the period. During the three months ended August 31, 2024, we invested $2.6 million in new and existing portfolio companies and had $60.1 million in aggregate amount of exits and repayments resulting in net repayments of $(57.5) million for the period.

During the six months ended August 31, 2025, we invested $102.3 million in new and existing portfolio companies and had $94.9 million in aggregate amount of exits and repayments resulting in net investments of $7.4 million for the period. During the six months ended August 31, 2024, we invested $41.9 million in new and existing portfolio companies and had $135.8 million in aggregate amount of exits and repayments resulting in net repayments of $(93.9) million for the period.

Portfolio Composition

Our portfolio composition at August 31, 2025: and February 28, 2025: at fair value was as follows:

		August 31, 2025								February 28, 2025
		Percentage of Total Portfolio				Weighted Average Current Yield				Percentage of Total Portfolio				Weighted Average Current Yield
First lien term loans			84.3	%			11.0	%			88.7	%			11.3	%
Second lien term loans			0.7				16.9				0.7				16.7
Unsecured term loans			1.7				10.5				1.7				10.7
Structured finance securities			5.4				12.2				1.5				19.9
Equity interests			7.9				-				7.4				-
Total			100.0	%			10.4	%			100.0	%			10.8	%

At August 31, 2025, our investment in the subordinated notes of Saratoga CLO, a collateralized loan obligation fund, had a fair value of $0.1 million and constituted 0.01% of our portfolio. This investment constitutes a first loss position in a portfolio that, as of August 31, 2025 and February 28, 2025, was composed of $462.9million and $527.1 million, respectively, in aggregate principal amount of primarily senior secured first lien term loans. In addition, as of August 31, 2025, we also own $9.4 million in aggregate principal of the F-2-R-3 Notes in the Saratoga CLO, which only rank senior to the subordinated notes.

This investment is subject to unique risks. (See Part 1. Item 1A. Risk Factors-"Our investment in Saratoga CLO constitutes a leveraged investment in a portfolio of subordinated notes representing the lowest-rated securities issued by a pool of predominantly senior secured first lien term loans and is subject to additional risks and volatility. All losses in the pool of loans will be borne by our subordinated notes and only after the value of our subordinated notes is reduced to zero will the higher-rated notes issued by the pool bear any losses." in our Annual Report on Form 10-K for the fiscal year ended February 28, 2025).

We do not consolidate the Saratoga CLO portfolio in our consolidated financial statements. Accordingly, the metrics below do not include the underlying Saratoga CLO portfolio investments. However, at August 31, 2025, $415.4 million or 96.7% of the Saratoga CLO portfolio investments in terms of market value had a CMR (as defined below) color rating of green or yellow and 10 Saratoga CLO portfolio investments were in default with a fair value of $11.5 million. At February 28, 2025, $484.3 million or 98.4% of the Saratoga CLO portfolio investments in terms of market value had a CMR color rating of green or yellow and eight of the Saratoga CLO portfolio investments were in default with a fair value of $4.4 million. For more information relating to the Saratoga CLO, see the audited financial statements for Saratoga in our Annual Report on Form 10-K for the fiscal year ended February 28, 2025.

Saratoga Investment Advisors normally grades all of our investments using a credit and monitoring rating system ("CMR"). The CMR consists of a single component: a color rating. The color rating is based on several criteria, including financial and operating strength, probability of default, and restructuring risk. The color ratings are characterized as follows: (Green)-performing credit; (Yellow)-underperforming credit; (Red)-in principal payment default and/or expected loss of principal.

Portfolio CMR distribution

The CMR distribution for our investments at August 31, 2025 and February 28, 2025 was as follows:

Saratoga Investment Corp.

		August 31, 2025								February 28, 2025
Color Score		Investments at Fair Value				Percentage of Total Portfolio				Investments at Fair Value				Percentage of Total Portfolio
		($ in thousands)
Green		$	900,920				90.5	%		$	890,437				91.0	%
Yellow			1,303				0.1				1,086				0.1
Red			1,847				0.2				1,547				0.2
N/A(1)			91,226				9.2				85,008				8.7
Total		$	995,295				100.0	%		$	978,078				100.0	%

(1)	Comprised of our investment in the subordinated notes of Saratoga CLO, equity interests, and BB and BBB CLO debt securities.

The CMR distribution of Saratoga CLO investments at August 31, 2025 and February 28, 2025 was as follows:

Saratoga CLO

		August 31, 2025								February 28, 2025
Color Score		Investments at Fair Value				Percentage of Total Portfolio				Investments at Fair Value				Percentage of Total Portfolio
		($ in thousands)
Green		$	393,775				91.7	%		$	446,859				90.8	%
Yellow			21,644				5.0				37,453				7.6
Red			11,499				2.7				6,198				1.3
N/A(1)			2,574				0.6				1,685				0.3
Total		$	429,492				100.0	%		$	492,195				100.0	%

(1)	Comprised of Saratoga CLO's equity interests.

Portfolio composition by industry grouping at fair value

The following table shows our portfolio composition by industry grouping at fair value at August 31, 2025 and February 28, 2025:

Saratoga Investment Corp.

		August 31, 2025								February 28, 2025
		Investments At Fair Value				Percentage of Total Portfolio				Investments At Fair Value				Percentage of Total Portfolio
		($ in thousands)
Healthcare Services		$	96,671				9.7	%		$	85,149				8.5	%
Structured Finance Securities(1)			73,026				7.3				34,387				3.5
Consumer Services			59,257				6.0				59,439				6.1
HVAC Services and Sales			53,325				5.4				57,458				5.9
Real Estate Services			51,875				5.2				51,750				5.3
Healthcare Software			45,884				4.6				45,986				4.7
Research Software			36,940				3.7				26,280				2.7
Mental Healthcare Services			32,562				3.3				32,405				3.3
Education Services			32,189				3.2				27,533				2.8
Education Software			32,000				3.2				41,595				4.3
Custom Millwork Software			31,898				3.2				31,722				3.2
Restaurant			31,740				3.2				31,600				3.2
Dental Practice Management			31,196				3.1				35,159				3.6
Municipal Government Software			30,340				3.0				29,720				3.0
Employee Collaboration Software			28,082				2.8				27,179				2.8
Talent Acquisition Software			27,392				2.8				27,334				2.8
Financial Services			26,294				2.7				26,302				2.7
Architecture & Engineering Software			25,253				2.6				25,293				2.6
Health/Fitness Franchisor			24,957				2.5				28,453				2.9
Direct Selling Software			23,852				2.4				24,064				2.5
Mentoring Software			21,061				2.1				22,027				2.3
Insurance Software			20,983				2.1				20,345				2.1
IT Services			19,365				1.9				18,810				1.9
Marketing Orchestration Software			18,311				1.8				18,444				1.9
Fire Inspection Business Software			18,047				1.8				10,178				1.0
Corporate Education Software			17,763				1.8				17,346				1.8
Alternative Investment Management Software			14,323				1.5				11,576				1.2
Veterinary Services			13,358				1.3				12,667				1.3
Lead Management Software			11,526				1.2				11,641				1.2
HVAC Monitoring Devices			10,940				1.1				-				0.0
Supply Chain Planning Software			10,113				1.0				-				0.0
Industrial Products			9,564				1.0				9,404				1.0
Office Supplies			5,339				0.5				5,339				0.5
Cyber Security			3,857				0.4				3,517				0.4
Staffing Services			2,403				0.2				3,426				0.4
Specialty Food Retailer			1,847				0.2				1,546				0.2
Association Management Software			1,762				0.2				24,850				2.5
Non-profit Services			-				0.0				16,470				1.7
Financial Services Software			-				0.0				9,933				1.0
Field Service Management			-				0.0				11,751				1.2
Total		$	995,295				100.0	%		$	978,078				100.0	%

(1)	As of August 31, 2025 and February 28, 2025, the foregoing comprised of our investment in the subordinated notes and F-2-R-3 Notes of Saratoga CLO, the unsecured notes and equity interests in the SLF JV, E-Notes of SLF 2022, and BB and BBB CLO debt securities.

The following table shows Saratoga CLO's portfolio composition by industry grouping at fair value at August 31, 2025 and February 28, 2025:

Saratoga CLO

		August 31, 2025								February 28, 2025
		Investments at Fair Value				Percentage of Total Portfolio				Investments at Fair Value				Percentage of Total Portfolio
		($ in thousands)
Banking, Finance, Insurance & Real Estate		$	80,073				18.6	%		$	101,194				20.9	%
Services: Business			41,872				9.7				46,915				9.5
High Tech Industries			34,570				8.0				39,950				8.1
Services: Consumer			23,994				5.6				26,923				5.5
Chemicals, Plastics, & Rubber			22,475				5.2				25,268				5.1
Healthcare & Pharmaceuticals			21,984				5.1				26,032				5.3
Retail			21,807				5.1				22,306				4.5
Hotel, Gaming & Leisure			16,762				3.9				16,900				3.4
Media: Advertising, Printing & Publishing			14,361				3.3				17,309				3.4
Consumer Goods: Durable			14,344				3.3				14,008				2.7
Automotive			13,747				3.2				16,730				3.4
Telecommunications			13,656				3.2				19,475				4.0
Beverage, Food & Tobacco			12,574				2.9				12,920				2.6
Construction & Building			12,215				2.8				13,129				2.7
Containers, Packaging & Glass			10,975				2.6				13,522				2.7
Consumer goods: Non-durable			9,822				2.3				10,571				2.1
Aerospace & Defense			7,950				1.9				8,353				1.7
Wholesale			7,590				1.8				8,061				1.6
Transportation: Cargo			6,599				1.5				7,153				1.5
Utilities: Oil & Gas			6,381				1.6				6,417				1.3
Media: Broadcasting & Subscription			6,349				1.6				7,069				1.4
Capital Equipment			4,712				1.1				4,739				1.0
Media: Diversified & Production			4,426				1.0				6,286				1.3
Forest Products & Paper			4,066				0.9				4,408				0.9
Transportation: Consumer			3,673				0.9				3,727				0.8
Energy: Electricity			3,296				0.8				3,306				0.7
Energy: Oil & Gas			3,028				0.7				3,012				0.6
Environmental Industries			2,307				0.5				2,588				0.5
Utilities: Electric			1,988				0.5				1,988				0.4
Metals & Mining			1,897				0.4				1,936				0.4
Total		$	429,493				100.0	%		$	492,195				100.0	%

Portfolio composition by geographic location at fair value

The following table shows our portfolio composition by geographic location at fair value at August 31, 2025 and February 28, 2025. The geographic composition is determined by the location of the corporate headquarters of the portfolio company.

		August 31, 2025								February 28, 2025
		Investments at Fair Value				Percentage of Total Portfolio				Investments at Fair Value				Percentage of Total Portfolio
		($ in thousands)
Midwest		$	359,902				36.2	%		$	364,944				37.3	%
Southeast			206,361				20.7				234,144				23.9
Northeast			127,614				12.8				128,787				13.2
West			116,047				11.7				120,361				12.3
Southwest			79,247				8.0				63,278				6.5
International/Other			19,365				1.9				18,810				1.9
Other(1)			86,759				8.7				47,754				4.9
Total		$	995,295				100.0	%		$	978,078				100.0	%

(1)	Comprised of our investments in the subordinated notes, F-2-R-3 Notes of Saratoga CLO, as well as the unsecured notes and equity interests in the SLF JV, foreign investments the BB and BBB CLO debt securities.

Results of operations

Operating results for the three and six months ended August 31, 2025 and August 31, 2024 was as follows:

		For the three months ended								For the six months ended
		August 31, 2025				August 31, 2024				August 31, 2025				August 31, 2024
		($ in thousands)
Total investment income		$	30,626			$	43,003			$	62,944			$	81,682
Total operating expenses			21,545				24,806				43,722				49,149
Net investment income			9,081				18,197				19,222				32,533
Net realized gain (loss) from investments			53				(33,449	)			2,954				(54,644	)
Net change in unrealized appreciation (depreciation) on investments			3,727				28,728				4,672				42,660
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments			424				(158	)			369				(621	)
Net increase (decrease) in net assets resulting from operations		$	13,285			$	13,318			$	27,217			$	19,928

Investment income

The composition of our investment income for three and six months ended August 31, 2025 and August 31, 2024 was as follows:

		For the three months ended								For the six months ended
		August 31, 2025				August 31, 2024				August 31, 2025				August 31, 2024
		($ in thousands)
Interest from investments		$	26,377			$	39,365			$	54,381			$	73,672
Interest from cash and cash equivalents			2,360				1,671				4,388				2,296
Management fee income			664				792				1,369				1,597
Dividend Income			1,031				1,078				2,030				2,625
Structuring and advisory fee income			222				35				486				446
Other income			(28	)			62				291				1,047
Total investment income		$	30,626			$	43,003			$	62,945			$	81,683

For the three months ended August 31, 2025, total investment income decreased $12.4 million, or 28.8%, to $30.6 million from $43.0 million for the three months ended August 31, 2024. Interest income from investments decreased $13.0 million, or 33.0%, to $26.4 million for the three months ended August 31, 2025 from $39.4 million for the three months ended August 31, 2024. Interest income from investments decreased due to the (i) non-recurrence of $7.9 million interest income related to our Knowland investment recognized last year that was previously on non-accrual, and (ii) decrease of $45.4 million, or 4.4%, in total investments at August 31, 2025 from $1,040.7 million at August 31, 2024 to $995.3 million as of August 31, 2025, combined with the decrease in the weighted average current yield on investments to 10.4%, down from 11.5% at August 31, 2024, primarily due to the reduction in SOFR base rates during this period.

For the six months ended August 31, 2025, total investment income decreased $18.7 million, or 22.9%, to $62.9 million from $81.7 million for the six months ended August 31, 2024. Interest income from investments decreased $19.3 million, or 26.2%, to $54.4 million for the six months ended August 31, 2025 from $73.7 million for the six months ended August 31, 2024. Interest income from investments decreased due to the (i) non-recurrence of $7.9 million interest income related to our Knowland investment recognized last year that was previously on non-accrual, and (ii) decrease of the weighted average current yield on investments to 10.4% as of August 31, 2025, down from 11.5% at August 31, 2024, primarily due to the reduction in SOFR base rates during this period.

For the three and six months ended August 31, 2025 and August 31, 2024, total PIK income was $0.8 million and $1.6 million, respectively and $1.9 million and $2.5 million, respectively.

For the three months ended August 31, 2025 and August 31, 2024, interest from cash and cash equivalents was $2.4 million and $1.7 million, respectively. The increase of $0.7 million was due to increased cash and cash equivalents balances during this period as compared to last year, reflecting the significant levels of repayments experienced during this period.

For the six months ended August 31, 2025 and August 31, 2024, interest from cash and cash equivalents was $4.4 million and $2.3 million, respectively. The increase of $2.1 million was due to increased cash and cash equivalents balances during this period as compared to last year, reflecting the significant levels of repayments experienced during this period.

Management fee income reflects the fee income received for managing the Saratoga CLO. For the three months ended August 31, 2025 and August 31, 2024, total management fee income was $0.7 million and $0.8 million, respectively. For the six months ended August 31, 2025 and 2024, total management fee income was $1.4 million and $1.6 million, respectively.

For the three and six months ended August 31, 2025 and August 31, 2024, total dividend income was $1.0 million and $1.1 million, respectively and $2.0 million and $2.6 million. Dividends received are recorded in the consolidated statements of operations when earned, and the decrease primarily reflects lower dividend income of $0.9 million and $1.3 million, respectively, received on our membership interest in SLF JV during the three and six months ended August 31, 2025 as compared to the three and six months ended August 31, 2024.

For the three and six months ended August 31, 2025 and August 31, 2024, total structuring and advisory fee income was $0.2 million and $0.0 million, respectively and $0.5 million and $0.4 million. Structuring and advisory fee income represents fee income earned and received performing certain investment and advisory activities during the closing of new investments.

For the three and six months ended August 31, 2025 and August 31, 2024, other income was $0.0 million and $0.1 million, respectively and $0.3 million and $1.0 million, respectively. Other income includes origination fees, monitoring and amendment fees and prepayment fees and is recorded in the consolidated statements of operations when earned.

Operating expenses

The composition of our operating expenses for the three and six months ended August 31, 2025 and August 31, 2024 was as follows:

		For the three months ended								For the six months ended
		August 31, 2025				August 31, 2024				August 31, 2025				August 31, 2024
		($ in thousands)
Interest and debt financing expenses		$	12,372			$	13,129			$	24,824			$	26,091
Base management fees			4,374				4,766				8,708				9,749
Incentive management fees expense (benefit)			2,271				4,550				4,808				8,135
Professional fees			650				126				1,349				1,125
Administrator expenses			1,283				1,133				2,533				2,208
Insurance			74				78				149				155
Directors fees and expenses			119				80				250				193
General & administrative and other expenses			413				822				1,058				1,431
Income tax expense (benefit)			(11	)			122				43				62
Total operating expenses		$	21,545			$	24,806			$	43,722			$	49,149

For the three months ended August 31, 2025, total operating expenses decreased $3.3 million, or 13.2%, compared to the three months ended August 31, 2024. For the six months ended August 31, 2025, total operating expenses decreased $5.4, or 11.0%, compared to the six months ended August 31, 2024.

For the three months ended August 31, 2025, interest and debt financing expenses decreased $0.8 million, or 5.8%, compared to the three months ended August 31, 2024. The decrease is primarily attributable to a decrease of 5.8% in average outstanding debt from $836.9 million for the three months ended August 31, 2024 to $788.4 million for the three months ended August 31, 2025. For the six months ended August 31, 2025, interest and debt financing expenses decreased $1.3 million, or 3.9% compared to the six months ended August 31, 2024. The decrease is primarily attributable to a decrease of 5.3% in average outstanding debt from $835.0 million for the six months ended August 31, 2024 to $790.6 million for the six months ended August 31, 2025.

For the three and six months ended August 31, 2025 and August 31, 2024, the weighted average interest rate on our outstanding indebtedness was 5.57% and 6.06%, respectively and 5.58% and 6.06%, respectively.

As of August 31, 2025 and February 28, 2025, the SBA debentures represented 21.6% and 21.4% of overall debt, respectively.

For the three months ended August 31, 2025, base management fees decreased $0.4 million, or 8.2%, from $4.8 million to $4.4 million compared to the three months ended August 31, 2024. The decrease in base management fees results from the 8.2 % decrease in the average value of our total assets, less cash and cash equivalents, from $1,080.6 million for the three months ended August 31, 2024 to $991.7 million for the three months ended August 31, 2025.

For the six months ended August 31, 2025, base management fees decreased $1.0 million, or 10.7%, from $9.7 million to $8.7 million compared to the six months ended August 31, 2024. The decrease in base management fees results from the 10.7% decrease in the average value of our total assets, less cash and cash equivalents, from $1,105.1 million for the six months ended August 31, 2024 to $987.0 million for the six months ended August 31, 2025.

For the three months ended August 31, 2025, incentive management fees decreased $2.3 million to $2.3 million, or 50.4%, compared to $4.6 million the three months ended August 31, 2024. The incentive fee on income decreased from $4.6 million to $2.3 million for the three months ended August 31, 2024 and 2025, respectively, reflecting the decrease in net investment income during the three months ended August 31, 2025 as compared to the three months ended August 31, 2024. The incentive fee on capital gains remained unchanged at $0.8 million for both the three months ended August 31, 2024 and August 31, 2025, reflecting no incentive fee on net realized and unrealized depreciation recognized during both these periods, with the liability floor capped at zero.

For the six months ended August 31, 2025, incentive management fees decreased $3.3 million to $4.8 million, or 41.1%, compared to $8.1 million the six months ended August 31, 2024. The incentive fee on income decreased from $8.1 million to $4.8 million for the six months ended August 31, 2024 and 2025, respectively, reflecting the decrease in net investment income during the six months ended August 31, 2025 as compared to the six months ended August 31, 2024. The incentive fee on capital gains remained unchanged at $0.0 million for both the six months ended August 31, 2024 and August 31, 2025, reflecting no incentive fee on net realized and unrealized depreciation recognized during both these periods, with the liability floor capped at zero.

For the three months ended August 31, 2025, professional fees increased $0.5 million, or 416.3% compared to the three months ended August 31, 2024.

For the six months ended August 31, 2025, professional fees increased $0.2 million, or 19.9% compared to the six months ended August 31, 2024.

For the three months ended August 31, 2025, administrator expenses increased $0.2 million, or 13.2% compared to the three months ended August 31, 2024, reflecting the contractual changes to the administrator agreement cap.

For the six months ended August 31, 2025, administrator expenses increased $0.3 million, or 14.7% compared to the six months ended August 31, 2024, reflecting the contractual changes to the administrator agreement cap.

For the three months ended August 31, 2025, general and administrative expenses decreased $0.4 million, or 49.8% compared to the three months ended August 31, 2024.

For the six months ended August 31, 2025, general and administrative expenses increased $0.4 million, or 26.0% compared to the six months ended August 31, 2024.

As discussed above, the decrease in interest and debt financing expenses for the three months ended August 31, 2025 compared to the three months ended August 31, 2024 is primarily attributable to a decrease in the overall average dollar amount of outstanding debt. For the three months ended August 31, 2025 and August 31, 2024, the average borrowings outstanding under the Encina Credit Facility was $32.5 million and $32.5 million, respectively, and the average weighted average interest rate on the outstanding borrowing under the Encina Credit Facility was 8.9% and 9.9%, respectively. For the three months ended August 31, 2025 and August 31, 2024, the average borrowings outstanding under the Live Oak Credit Facility was $37.5 million and $19.0 million, respectively, and the average weighted average interest rate on the outstanding borrowing under the Live Oak Credit Facility was 8.5% and 9.6%, respectively. For the three months ended August 31, 2025 and August 31, 2024, the average borrowings outstanding of SBA debentures was $170.0 million and $214.0 million, respectively. For the three months ended August 31, 2025 and August 31, 2024, the weighted average interest rate on the outstanding borrowings of the SBA debentures was 3.0% and 3.3%, respectively. For the three months ended August 31, 2025 and August 31, 2024, the average borrowings outstanding of our Notes Payable was $546.4 million and $571.4 million, respectively. For the three months ended August 31, 2025 and August 31, 2024, the weighted average interest rate on the Notes Payable was 5.96% and 6.06%, respectively.

As discussed above, the decrease in interest and debt financing expenses for the six months ended August 31, 2025 compared to the six months ended August 31, 2024 is primarily attributable to a decrease in the overall average dollar amount of outstanding debt. For the six months ended August 31, 2025 and August 31, 2024, the average borrowings outstanding under the Encina Credit Facility was $32.5 million and $33.6 million, respectively, and the average weighted average interest rate on the outstanding borrowing under the Encina Credit Facility was 8.9% and 9.9%, respectively. For the six months ended August 31, 2025 and August 31, 2024, the average borrowings outstanding under the Live Oak Credit Facility was $35.0 million and $16.0 million, respectively, and the average weighted average interest rate on the outstanding borrowing under the Live Oak Credit Facility was 8.5% and 9.5%, respectively. For the six months ended August 31, 2025 and August 31, 2024, the average borrowings outstanding of SBA debentures was $170.0 million and $214.0 million, respectively. For the six months ended August 31, 2025 and August 31, 2024, the weighted average interest rate on the outstanding borrowings of the SBA debentures was 3.0% and 3.4%, respectively. For the six months ended August 31, 2025 and August 31, 2024, the average borrowings outstanding of our Notes Payable was $546.4 million and $571.4 million, respectively. For the six months ended August 31, 2025 and August 31, 2024, the weighted average interest rate on the Notes Payable was 6.0% and 6.1%, respectively.

The weighted average dollar amount of our unsecured notes for the three and six months ended August 31, 2025 and August 31, 2024 was as follows:

		For the three months ended								For the six months ended
		August 31, 2025				August 31, 2024				August 31, 2025				August 31, 2024
		($ in thousands)
7.75% 2025 Notes		$	-			$	5.0			$	5.0			$	5.0
6.25% 2027 Notes			15.0				15.0				15.0				15.0
4.375% 2026 Notes			175.0				175.0				175.0				175.0
4.35% 2027 Notes			75.0				75.0				75.0				75.0
6.00% 2027 Notes			105.5				105.5				105.5				105.5
7.00% 2025 Notes			12.0				12.0				12.0				12.0
8.00% 2027 Notes			46.0				46.0				46.0				46.0
8.125% 2027 Notes			60.4				60.4				60.4				60.4
8.75% 2024 Notes			-				20.0				0.0				20.0
8.50% 2028 Notes			57.5				57.5				57.5				57.5

For the three and six months ended August 31, 2025 and August 31, 2024, there were income tax expense (benefits) of ($.01) million and $0.1 million, respectively and $.04 million and $0.1 million This relates to net deferred federal and state income tax expense (benefit) with respect to operating gains and losses and income derived from equity investments held in entities that are treated as corporations for U.S. federal income tax purposes, as well as current U.S. federal and state income taxes on those operating gains and losses when realized.

Net realized gains (losses) on sales of investments

For the three months ended August 31, 2025, we had $29.8 million of sales, repayments, exits or restructurings resulting in $0.05 million of net realized gains. For the six months ended August 31, 2025, we had $94.9 million of sales, repayments, exits or restructurings resulting in $3.0 million of net realized gains.

The most significant cumulative net change in realized gains (losses) for the six months ended August 31, 2025 were the following (dollars in thousands):

Six Months ended August 31, 2025

Issuer		Asset Type		Gross Proceeds				Cost				Net Realized Gain (Loss)
HemaTerra Holdings Company, LLC		First Lien Term Loan & Equity Interests		$	-			$	(97	)		$	97
Identity Automation Systems		First Lien Term Loan & Equity Interests			(2,570	)			(4,735	)			2,166
Netreo Holdings, LLC		First Lien Term Loan & Equity Interests			-				(638	)			638

We received escrow payments from the prior sales of our investments in HemaTerra Holdings Company, LLC and Netreo Holdings, LLC.

The $2.2 million of net realized gains was from the sale of the equity positions in our Identity Automation Systems investment.

For the three months ended August 31, 2024, we had $60.1 million of sales, repayments, exits or restructurings resulting in $33.4 million of net realized losses. For the six months ended August 31, 2024, we had $135.8 million of sales, repayments, exits or restructurings resulting in $54.6 million of net realized losses.

The most significant cumulative net change in realized gains (losses) for the six months ended August 31, 2024 were the following (dollars in thousands):

Six Months ended August 31, 2024

Issuer		Asset Type		Gross Proceeds				Cost				Net Realized Gain (Loss)
Zollege PBC		First Lien Term Loan & Equity Interests		$	3,205			$	18,316			$	(15,111	)
Netreo Holdings, LLC		Equity Interests			2,260				8,344				(6,084	)
Book4Time, Inc.		First Lien Term Loan, Second Lien Term Loan & Equity Interests			707				157				550
Pepper Palace, Inc.		First Lien Term Loan & Equity Interests			-				-				(34,007	)

The $15.1 million of net realized losses was from the restructuring of our Zollege PBC investment.

The $6.1 million of net realized losses was from the sale of the equity position in our Netreo Holdings, LLC investment.

The $0.6 million of net realized gains was from the sale of the equity position in our Book4Time, Inc. investment.

The $34.0 million of net realized losses was from the restructuring of our Pepper Palace, Inc. investment.

Net change in unrealized appreciation (depreciation) on investments

For the six months ended August 31, 2025, our investments had a net change in unrealized appreciation of $4.7 million compared to a net change in unrealized depreciation of $42.7 million for the six months ended August 31, 2024.

The most significant cumulative net change in unrealized appreciation (depreciation) for the six months ended August 31, 2025 were the following (dollars in thousands):

Six Months ended August 31, 2025

Issuer		Asset Type		Cost				Fair Value				Total Unrealized Appreciation (Depreciation)				YTD Change in Unrealized Appreciation (Depreciation)
Zollege PBC		First Lien Term Loan & Equity Interests		$	2,098			$	8,610			$	6,512			$	4,595
Identity Automation Systems		First Lien Term Loan & Equity Interests			-				-				-				(1,108	)
Avionte Holdings		Equity Interests			100				2,403				2,303				(1,024	)

The $4.6 million net change in unrealized appreciation in our investment in Zollege PBC was driven by improved Company performance.

The $1.1 million net change in unrealized depreciation in our investment in Identity Automation Systems was driven by the sale of the equity position, resulting in a reversal of previously recognized unrealized appreciation reclassified to realized gain.

The $1.1 million net change in unrealized depreciation in our investment in Avionte Holdings was driven by a change in the industry multiple.

The most significant cumulative net change in unrealized appreciation (depreciation) for the six months ended August 31, 2024 were the following (dollars in thousands):

Six Months ended August 31, 2024

Issuer		Asset Type		Cost				Fair Value				Total Unrealized Appreciation (Depreciation)				YTD Change in Unrealized Appreciation (Depreciation)
Pepper Palace, Inc.		First Lien Term Loan & Equity Interests		$	2,686			$	1,461			$	(1,225	)		$	31,724
Zollege PBC		First Lien Term Loan & Equity Interests			2,016				2,177				161				14,325
Artemis Wax Corp		First Lien Term Loan & Equity Interests			60,485				60,276				(209	)			(4,690	)
Saratoga Senior Loan Fund I JV, LLC		Equity Interests			35,202				21,407				(13,795	)			(3,815	)
Netreo Holdings, LLC		First Lien Term Loan & Equity Interests			-				-				-				3,803
Saratoga Investment Corp. CLO 2013-1, Ltd.		Structured Finance Securities			9,375				5,273				(4,102	)			(3,602	)
ARC Health OpCo LLC		First Lien Term Loan & Equity Interests			37,519				33,807				(3,712	)			(3,577	)
Invita (fka HemaTerra Holding Company, LLC)		First Lien Term Loan, Second Lien Term Loan & Equity Interests			69,960				75,728				5,768				2,675
Axero Holdings, LLC		First Lien Term Loan, Revolving Credit & Equity Interests			10,678				16,136				5,458				1,981
ETU Holdings, Inc.		First Lien Term Loan, Second Lien Term Loan & Equity Interests			16,519				13,057				(3,462	)			(1,026	)

The $31.8 million net change in unrealized appreciation in our investment in Pepper Palace, Inc. was driven by the restructuring of the investment, resulting in a reversal of previously recognized unrealized depreciation reclassified to realized loss.

The $14.3 million net change in unrealized appreciation in our investment in Zollege PBC was driven by the restructuring of the investment, resulting in a reversal of previously recognized unrealized depreciation reclassified to realized loss.

The $4.7 million of net change in unrealized depreciation in our investment in Artemis Wax Corp. was driven by a decline in company performance, overall market conditions and capital structure changes.

The $3.8 million net change in unrealized depreciation in our investment in Saratoga Senior Loan Fund I, JV, LLC was driven by the impact of overall market conditions.

The $3.8 million net change in unrealized appreciation in our investment in Netreo Holdings, LLC was driven by the sale of the equity position, resulting in a reversal of previously recognized unrealized depreciation reclassified to realized loss.

The $3.6 million net change in unrealized depreciation in our investment in Saratoga Investment Corp. CLO 2013-1, Ltd. was driven by the quarterly cash distribution, as well as a reduction in the carrying value of certain defaulted loans in the portfolio, as well as overall market conditions.

The $3.5 million of net change in unrealized depreciation in our investment in ARC Health OpCo LLC was driven by declines in company performance and capital structure changes.

The $2.7 million net change in unrealized depreciation in our investment in Invita (fka HemaTerra Holding Company, LLC) was driven by strong financial results and market factors.

The $2.0 million net change in unrealized appreciation in our investment in Axero Holdings, LLC was driven by strong financial performance.

The $1.0 million of net change in unrealized depreciation in our investment in ETU Holdings, Inc. was driven by a decline in company performance and overall market conditions.

Changes in net assets resulting from operations

For the three months ended August 31, 2025, we recorded a net increase in net assets resulting from operations of $13.3 million. Based on 15,775,387 weighted average common shares outstanding as of August 31, 2025, our per share net increase in net assets resulting from operations was $0.84 for the three months ended August 31, 2025. For the three months ended August 31, 2024, we recorded a net increase in net assets resulting from operations of $13.3 million. Based on 13,726,142 weighted average common shares outstanding as of August 31, 2024, our per share net increase in net assets resulting from operations was $0.97 for the three months ended August 31, 2024.

For the six months ended August 31, 2025, we recorded a net increase in net assets resulting from operations of $27.2 million. Based on 15,560,114 weighted average common shares outstanding as of August 31, 2025, our per share net increase in net assets resulting from operations was $1.75 for the six months ended August 31, 2025. For the six months ended August 31, 2024, we recorded a net increase in net assets resulting from operations of $19.9 million. Based on 13,704,759 weighted average common shares outstanding as of August 31, 2024, our per share net increase in net assets resulting from operations was $1.45 for the six months ended August 31, 2024.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

We intend to continue to generate cash primarily from cash flows from operations, including interest earned from our investments in debt in middle-market companies, interest earned from the temporary investment of cash in U.S. government securities and other high-quality debt investments that mature in one year or less, the Encina Credit Facility and the Live Oak Credit Facility, our continued access to the SBA debentures future borrowings and future offerings of debt and equity securities.

Although we expect to fund the growth of our investment portfolio through the net proceeds from future equity offerings, including our dividend reinvestment plan ("DRIP"), our equity ATM Program (as defined below), and issuances of senior securities or future borrowings, to the extent permitted by the 1940 Act, we cannot assure you that our plans to raise capital will be successful. In this regard, because our common stock has historically traded at a price below our current NAV per share and we are limited in our ability to sell our common stock at a price below NAV per share, we have been and may continue to be limited in our ability to raise equity capital.

In addition, we intend to distribute to our stockholders substantially all of our operating taxable income in order to satisfy the distribution requirement applicable to RICs under the Code. In satisfying this distribution requirement, in accordance with certain applicable provisions of the Code and the Treasury regulations and a revenue procedure issued by the Internal Revenue Service ("IRS"), a RIC may treat a distribution of its own stock as fulfilling its RIC distribution requirements if each stockholder may elect to receive his or her entire distribution in either cash or stock of the RIC subject to a limitation that the aggregate amount of cash to be distributed to all stockholders must be at least 20% of the aggregate declared distribution. We may rely on the revenue procedure in future periods to satisfy our RIC distribution requirement.

Also, as a BDC, we generally are required to meet a coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, to total senior securities, which include all of our borrowings and any outstanding preferred stock, of at least 200%, reduced to 150% effective April 16, 2019 following the approval received from our board of directors, including a majority of our independent directors, on April 16, 2018. This requirement limits the amount that we may borrow. Our asset coverage ratio, as defined in the 1940 Act, was 166.6% as of August 31, 2025 and 162.9% as of February 28, 2025. To fund growth in our investment portfolio in the future, we anticipate needing to raise additional capital from various sources, including the equity markets and other public and private debt-related markets, which may or may not be available on favorable terms, if at all.

Consequently, we may not have the funds or the ability to fund new investments, to make additional investments in our portfolio companies, to fund our unfunded commitments to portfolio companies, to pay dividends or to repay borrowings. Also, the illiquidity of our portfolio investments may make it difficult for us to sell these investments when desired and, if we are required to sell these investments, we may realize significantly less than their recorded value.

Due to the diverse capital sources available to us at this time, we believe we have adequate liquidity to support our near-term capital requirements.

Encina Credit Facility

Below is a summary of the terms of the senior secured revolving credit facility we entered into with Encina Lender Finance, LLC on October 4, 2021.

Commitment. We entered into the Credit and Security Agreement (the "Encina Credit Agreement") relating to the Encina Credit Facility in the initial facility amount of $50.0 million (the "Encina Facility Amount").

Availability. We can draw up to the lesser of (i) the Encina Facility Amount and (ii) the borrowing base. The borrowing base is an amount equal to (i) the difference of (A) the product of the applicable advance rate which varies from 50.0% to 75.0% depending on the type of loan asset (Defaulted Loans being excluded in that they carry an advance rate of 0%) and the value, determined in accordance with the Encina Credit Facility (the "Adjusted Borrowing Value"), of certain "eligible" loan assets pledged as security for the loan (the "Borrowing Base Value") and (B) the Excess Concentration Amount, as calculated in accordance with the Encina Credit Facility, plus (ii) any amounts held in the Prefunding Account and, without duplication, Excess Cash held in the Collection Account, less (iii) the product of (a) the amount of any undrawn funding commitments we have under any loan asset and (b) the Unfunded Exposure Haircut Percentage, and less (iv) $100,000. Each loan asset we held as of the date on which the Encina Credit Facility was closed was valued as of that date and each loan asset that we acquire after such date will be valued at the lowest of its fair value, its face value (excluding accrued interest) and the purchase price paid for such loan asset. Adjustments to the value of a loan asset will be made to reflect, among other things and under certain circumstances, changes in its fair value, a default by the obligor on the loan asset, insolvency of the obligor, acceleration of the loan asset, and certain modifications to the terms of the loan asset.

The Encina Credit Facility contains limitations on the type of loan assets that are "eligible" to be included in the borrowing base and as to the concentration level of certain categories of loan assets in the borrowing base such as restrictions on geographic and industry concentrations, asset size and quality, payment frequency, status and terms, average life, and collateral interests. In addition, if an asset is to remain an "eligible" loan asset, we may not make changes to the payment, amortization, collateral and certain other terms of the loan assets without the consent of the administrative agent that will either result in subordination of the loan asset or be materially adverse to the lenders.

The Encina Credit Facility requires certain minimum drawn amounts. For the period beginning on the closing date and ending April 4, 2022, the minimum funding amount was $12.5 million. For the period beginning on April 5, 2022 through maturity, the minimum funding amount is the greater of $25.0 million and 50% of the Encina Facility Amount in effect from time to time.

Collateral. The Encina Credit Facility is secured by assets of Saratoga Investment Funding II LLC ("SIF II") and pledged to Encina under the Encina Credit Facility. SIF II is a wholly owned special purpose entity formed for the purpose of entering into the Encina Credit Facility.

Interest Rate and Fees. Under the Encina Credit Facility, funds were borrowed from or through certain lenders at the greater of the prevailing LIBOR rate and 0.75%, plus an applicable margin of 4.00%. The Encina Credit Agreement includes benchmark replacement provisions which permit the Administrative Agent and the borrower to select a replacement rate upon the unavailability of LIBOR. In addition, we pay the lenders a commitment fee of 0.75% per year (or 0.50% if the ratio of advances outstanding to aggregate commitments is greater than or equal to 50%) on the unused amount of the Encina Credit Facility for the duration of the term of the Encina Credit Facility. Accrued interest and commitment fees are payable monthly in arrears. We were also obligated to pay certain other fees to the lenders in connection with the closing of the Encina Credit Facility.

Collateral Tests. It is a condition precedent to any borrowing under the Encina Credit Facility that the principal amount outstanding under the Encina Credit Facility, after giving effect to the proposed borrowings, not exceed the borrowing base (the "Borrowing Base Test"). In addition to satisfying the Borrowing Base Test, the following tests must also be satisfied (together with Borrowing Base Test, the "Collateral Tests"):

●

Interest Coverage Ratio. The ratio (expressed as a percentage) of interest collections with respect to pledged loan assets, less certain fees and expenses relating to the Encina Credit Facility, to accrued interest and commitment fees payable to the lenders under the Encina Credit Facility for the last 6 payment periods must equal at least 175.0%.

●

Overcollateralization Ratio. The ratio (expressed as a percentage) of the aggregate Adjusted Borrowing Value of "eligible" pledged loan assets plus the fair value of certain ineligible pledged loan assets (in each case, subject to certain adjustments) to outstanding borrowings under the Encina Credit Facility plus the Unfunded Exposure Amount must equal at least 200.0%.

The Encina Credit Facility also may require payment of outstanding borrowings or replacement of pledged loan assets upon our breach of our representation and warranty that pledged loan assets included in the borrowing base are "eligible" loan assets. Such ineligible collateral loans will be excluded from the calculation of the borrowing base and may lead to a Borrowing Base Deficiency, which may be cured by effecting one or more (or any combination thereof) of the following actions: (A) deposit into or credit to the collection account cash and eligible investments, (B) repay outstanding borrowings (together with certain costs and expenses), (C) sell or substitute loan assets in accordance with the Encina Credit Facility, or (D) pledge additional loan assets as collateral. Compliance with the Collateral Tests is also a condition to the discretionary sale of pledged loan assets by us.

Priority of Payments. The priority of payments provisions of the Encina Credit Facility require, after payment of specified fees and expenses, that collections of interest from the loan assets and, to the extent that these are insufficient, collections of principal from the loan assets, be applied on each payment date to payment of outstanding borrowings if the Borrowing Base Test, the Overcollateralization Ratio and the Interest Coverage Ratio would not otherwise be met.

Operating Expenses. The priority of payments provision of the Encina Credit Facility provides for the payment of certain of our operating expenses out of collections on interest and principal in accordance with the priority established in such provision. The operating expenses payable pursuant to the priority of payment provisions is limited to $200,000 per annum.

Covenants; Representations and Warranties; Events of Default. The Encina Credit Agreement contains customary representations and warranties, affirmative covenants, negative covenants and events of default. The Encina Credit Agreement does not contain grace periods for breach by us of any negative covenants or of certain of the affirmative covenants, including, without limitation, those related to preservation of the existence and separateness of the Company. Other events of default under the Encina Credit Agreement include, among other things, the following:

●

our failure to maintain an Interest Coverage Ratio of less than 175%;

●

our failure to maintain an Overcollateralization Ratio of less than 200%;

●

the filing of certain ERISA or tax liens on our assets or the Equity holder;

●

failure by Specified Holders to collectively, directly or indirectly, own and control at least 51% of the outstanding equity interests of Saratoga Investment Advisor, or (y) possess the right to elect (through contract, ownership of voting securities or otherwise) at all times a majority of the board of directors (or similar governing body) of Saratoga Investment Advisor and to direct the management policies and decisions of Saratoga Investment Advisor, or (ii) the dissolution, termination or liquidation in whole or in part, transfer or other disposition, in each case, of all or substantially all of the assets of, Saratoga Investment Advisor;

●

indictment or conviction of Saratoga Investment Advisors or any "key person" for a felony offense, or any fraud, embezzlement or misappropriation of funds by Saratoga Investment Advisors or any "key person" and, in the case of "key persons," without a reputable, experienced individual reasonably satisfactory to Encina Lender Finance appointed to replace such key person within 30 days;

●

resignation, termination, disability or death of a "key person" or failure of any "key person" to provide active participation in Saratoga Investment Advisors' daily activities, all without a reputable, experienced individual reasonably satisfactory to Encina Lender Finance appointed within 30 days.

Fees and Expenses. We paid certain fees and reimbursed Encina Lender Finance, LLC for the aggregate amount of all documented, out-of-pocket costs and expenses, including the reasonable fees and expenses of lawyers, incurred by Encina Lender Finance, LLC in connection with the Encina Credit Facility and the carrying out of any and all acts contemplated thereunder up to and as of the date of closing. These amounts totaled $1.4 million.

On January 27, 2023, we entered into the first amendment to the Encina Credit Agreement to, among other things:

●

increased the borrowings available under the Encina Credit Facility from up to $50.0 million to up to $65.0 million;

●

changed the underlying benchmark used to compute interest under the Encina Credit Agreement from LIBOR to Term SOFR for a one-month tenor plus a 0.10% credit spread adjustment;

●

increased the applicable effective margin rate on borrowings from 4.00% to 4.25%;

●

extended the revolving period from October 4, 2024 to January 27, 2026;

●

extended the period during which the borrower may request one or more increases in the borrowings available under the Encina Credit Facility (each such increase, a "Facility Increase") from October 4, 2023 to January 27, 2025, and increased the maximum borrowings available pursuant to the Encina Facility Increase from $75.0 million to $150.0 million;

●

revised the eligibility criteria for eligible collateral loans to exclude certain industries in which an obligor or related guarantor may be involved; and

●

amended the provisions permitting the borrower to request an extension in the Commitment Termination Date (as defined in the Encina Credit Agreement) to allow requests to extend any applicable Commitment Termination Date, rather than a one-time request to extend the original Commitment Termination Date, subject to a notice requirement.

As of August 31, 2025, we had $32.5 million outstanding borrowings under the Encina Credit Facility. Our borrowing base under the Encina Credit Facility at August 31, 2025 was $78.4 million.

Live Oak Credit Facility

Below is a summary of the terms of the senior secured revolving credit facility we entered into with Live Oak Banking Company on March 27, 2024.

Commitment. We entered into the Credit and Security Agreement (the "Live Oak Credit Agreement") relating to the Live Oak Credit Facility in the initial facility amount of $50.0 million (the "Live Oak Facility Amount").

Availability. We can draw up to the lesser of (i) the Live Oak Facility Amount and (ii) the borrowing base. The borrowing base is an amount equal to (i) the difference of (A) the product of the applicable advance rate which varies from 50.0% to 75.0% depending on the type of loan asset (Defaulted Loans being excluded in that they carry an advance rate of 0%) and the value, determined in accordance with the Encina Credit Facility (the "Adjusted Borrowing Value"), of certain "eligible" loan assets pledged as security for the loan (the "Borrowing Base Value") and (B) the Excess Concentration Amount, as calculated in accordance with the Encina Credit Facility, plus (ii) any amounts held in the Prefunding Account and, without duplication, Excess Cash held in the Collection Account, less (iii) the product of (a) the amount of any undrawn funding commitments we have under any loan asset and (b) the Unfunded Exposure Haircut Percentage, and less (iv) $100,000. Each loan asset we held as of the date on which the Live Oak Credit Facility was closed was valued as of that date and each loan asset that we acquire after such date will be valued at the lowest of its fair value, its face value (excluding accrued interest) and the purchase price paid for such loan asset. Adjustments to the value of a loan asset will be made to reflect, among other things and under certain circumstances, changes in its fair value, a default by the obligor on the loan asset, insolvency of the obligor, acceleration of the loan asset, and certain modifications to the terms of the loan asset.

The Live Oak Credit Facility contains limitations on the type of loan assets that are "eligible" to be included in the borrowing base and as to the concentration level of certain categories of loan assets in the borrowing base such as restrictions on geographic and industry concentrations, asset size and quality, payment frequency, status and terms, average life, and collateral interests. In addition, if an asset is to remain an "eligible" loan asset, we may not make changes to the payment, amortization, collateral and certain other terms of the loan assets without the consent of the administrative agent that will either result in subordination of the loan asset or be materially averse to the lenders.

The Live Oak Credit Facility requires certain minimum drawn amounts. For the period beginning on the closing date of March 27, 2025, and ending March 27, 2027, the minimum funding amount was $12.5 million. For the period beginning on March 28, 2025, through maturity, the minimum funding amount is the greater of $25.0 million and 50% of the Live Oak Facility Amount in effect from time to time.

Collateral. The Live Oak Credit Facility is secured by assets of Saratoga Investment Funding III LLC ("SIF III") and pledged to Live Oak under the Live Oak Credit Facility. SIF III is a wholly owned special purpose entity formed for the purpose of entering into the Live Oak Credit Facility.

Interest Rate and Fees. Advances under the Live Oak Credit Facility bear interest at a floating rate per annum equal to the greater of the prevailing Adjusted Term SOFR and 0.75%, plus an applicable margin between 3.50% and 4.25% based on the Live Oak Credit Facility's utilization. In addition, we pay the lenders a commitment fee of 0.50% per year on the unused amount of the Live Oak Credit Facility for the duration of the term of the Live Oak Credit Facility. Accrued interest and commitment fees are payable monthly in arrears. We were also obligated to pay certain other fees to the lenders in connection with the closing of the Live Oak Credit Facility.

Collateral Tests. It is a condition precedent to any borrowing under the Live Oak Credit Facility that the principal amount outstanding under the Live Oak Credit Facility, after giving effect to the proposed borrowings, not exceed the borrowing base (the "Borrowing Base Test"). In addition to satisfying the Borrowing Base Test, the following tests must also be satisfied (together with Borrowing Base Test, the "Collateral Tests"):

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Interest Coverage Ratio. The ratio (expressed as a percentage) of interest collections with respect to pledged loan assets, less certain fees and expenses relating to the Live Oak Credit Facility, to accrued interest and commitment fees payable to the lenders under the Live Oak Credit Facility for the last 6 payment periods must equal at least 175.0%.

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Overcollateralization Ratio. The ratio (expressed as a percentage) of the aggregate Adjusted Borrowing Value of "eligible" pledged loan assets plus the fair value of certain ineligible pledged loan assets (in each case, subject to certain adjustments) to outstanding borrowings under the Live Oak Credit Facility plus the Unfunded Exposure Amount must equal at least 200.0%.

The Live Oak Credit Facility also may require payment of outstanding borrowings or replacement of pledged loan assets upon our breach of our representation and warranty that pledged loan assets included in the borrowing base are "eligible" loan assets. Such ineligible collateral loans will be excluded from the calculation of the borrowing base and may lead to a Borrowing Base Deficiency, which may be cured by effecting one or more (or any combination thereof) of the following actions: (A) deposit into or credit to the Collection Account cash and Eligible Investments, (B) repay Advances (together with all accrued and unpaid costs and expenses of the Agents, Custodian, Collateral Administrator, Securities Intermediary and the Lenders), (C) sell or substitute Collateral Loans in accordance with Article X, or (D) pledge additional Collateral Loans as Collateral.

Priority of Payments. The priority of payments provisions of the Live Oak Credit Facility require, after payment of specified fees and expenses, that collections of interest from the loan assets and, to the extent that these are insufficient, collections of principal from the loan assets, be applied on each payment date to payment of outstanding borrowings if the Borrowing Base Test, the Overcollateralization Ratio and the Interest Coverage Ratio would not otherwise be met.

Operating Expenses. The priority of payments provision of the Live Oak Credit Facility provides for the payment of certain of our operating expenses out of collections on interest and principal in accordance with the priority established in such provision. The operating expenses payable pursuant to the priority of payment provisions is limited to $200,000 per annum.

Covenants; Representations and Warranties; Events of Default. The Live Oak Credit Agreement contains customary representations and warranties, affirmative covenants, negative covenants and events of default. The Live Oak Credit Agreement does not contain grace periods for breach by us of any negative covenants or of certain of the affirmative covenants, including, without limitation, those related to preservation of the existence and separateness of the Company. Other events of default under the Live Oak Credit Agreement include, among other things, the following:

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our failure to maintain an Interest Coverage Ratio of less than 175%;

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our failure to maintain an Overcollateralization Ratio of less than 200%;

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the filing of certain ERISA or tax liens on our assets or the Equity holder;

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failure by Specified Holders to collectively, directly or indirectly, own and control at least 51% of the outstanding equity interests of Saratoga Investment Advisor, or (y) possess the right to elect (through contract, ownership of voting securities or otherwise) at all times a majority of the board of directors (or similar governing body) of Saratoga Investment Advisor and to direct the management policies and decisions of Saratoga Investment Advisor, or (ii) the dissolution, termination or liquidation in whole or in part, transfer or other disposition, in each case, of all or substantially all of the assets of, Saratoga Investment Advisor;

●

indictment or conviction of Saratoga Investment Advisors or any "key person" for a felony offense, or any fraud, embezzlement or misappropriation of funds by Saratoga Investment Advisors or any "key person" and, in the case of "key persons," without a reputable, experienced individual reasonably satisfactory to Live Oak Lender Finance appointed to replace such key person within 30 days;

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resignation, termination, disability or death of a "key person" or failure of any "key person" to provide active participation in Saratoga Investment Advisors' daily activities, all without a reputable, experienced individual reasonably satisfactory to Live Oak Lender Finance appointed within 30 days.

Fees and Expenses. We paid certain fees and reimbursed Live Oak Lender Finance, LLC for the aggregate amount of all documented, out-of-pocket costs and expenses, including the reasonable fees and expenses of lawyers, incurred by Live Oak Banking Company in connection with the Live Oak Credit Facility and the carrying out of any and all acts contemplated thereunder up to and as of the date of closing. These amounts totaled $0.8 million.

As of August 31, 2025 there was $37.5 million in outstanding borrowings under the Live Oak Credit Facility. During the applicable period, we were in compliance with all of the limitations and requirements under the Live Oak Credit Agreement. Our borrowing base under the Live Oak Credit Facility at August 31, 2025 was $77.3 million

SBA-guaranteed debentures

In addition, we, through two current wholly owned subsidiaries, sought and obtained licenses from the SBA to operate an SBIC. In this regard, our wholly owned subsidiaries, SBIC II LP, and SBIC III LP, received an SBIC license from the SBA on August 14, 2019, and September 29, 2022, respectively. SBICs are designated to stimulate the flow of private equity capital to eligible small businesses. Under SBA regulations, SBICs may make loans to eligible small businesses and invest in the equity securities of small businesses. Our wholly owned subsidiary SBIC LP fully repaid its outstanding debentures and subsequently surrendered its license to the SBA on January 3, 2023, and SBIC LP subsequently merged with and into the Company.

The SBIC license allows our SBIC Subsidiaries to obtain leverage by issuing SBA-guaranteed debentures. SBA-guaranteed debentures are non-recourse, interest only debentures with interest payable semi-annually and have a ten-year maturity. The principal amount of SBA-guaranteed debentures is not required to be paid prior to maturity but may be prepaid at any time without penalty. The interest rate of SBA-guaranteed debentures is fixed on a semi-annual basis at a market-driven spread over U.S. Treasury Notes with 10-year maturities.

The SBIC Subsidiaries are regulated by the SBA. SBA regulations currently limit the amount that our SBIC Subsidiaries may individually borrow up to a maximum of $175.0 million of SBA debentures if the SBIC Subsidiary has at least $87.5 million in regulatory capital, subject to the SBA's approval. Under current SBIC regulations, for two or more SBICs under common control, the maximum amount of outstanding SBA debentures cannot exceed $350.0 million. The SBIC Subsidiaries are able to borrow funds from the SBA against regulatory capital (which generally approximates equity capital in the respective SBIC) and is subject to customary regulatory requirements, including, but not limited to, periodic examination by the SBA.

We received exemptive relief from the SEC to permit us to exclude the debt of our SBIC Subsidiaries guaranteed by the SBA from the definition of senior securities in the asset coverage test under the 1940 Act. This allows us increased flexibility under the asset coverage test by permitting us to borrow up to $350.0 million more than we would otherwise be able to absent the receipt of this exemptive relief. On April 16, 2018, as permitted by the Small Business Credit Availability Act, which was signed into law on March 23, 2018, our board of directors, including a majority of our independent directors, approved of our becoming subject to a minimum asset coverage ratio of 150% from 200% under Sections 18(a)(1) and 18(a)(2) of the Investment Company Act, as amended. The 150% asset coverage ratio became effective on April 16, 2019.

As of August 31, 2025 SBIC II LP had $87.5 million in regulatory capital and $131.0 million in SBA-guaranteed debentures outstanding and SBIC III LP had $87.5 million in regulatory capital and $39.0 million in SBA-guaranteed debentures outstanding.

Unsecured notes

7.75% 2025 Notes

On July 9, 2020, we issued $5.0 million in aggregate principal amount of our 7.75% fixed-rate notes due in 2025 (the "7.75% 2025 Notes") for net proceeds of $4.8 million after deducting underwriting commissions of approximately $0.2 million. Offering costs incurred were approximately $0.1 million. Interest on the 7.75% 2025 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 7.75% per year. The 7.75% 2025 Notes mature on July 9, 2025 and may be redeemed in whole or in part at any time or from time to time at our option, subject to a fee depending on the date of repayment. The net proceeds from the offering were used for general corporate purposes in accordance with our investment objective and strategies. Financing costs of $0.3 million related to the 7.75% 2025 Notes have been capitalized and are being amortized over the term of the Notes. The 7.75% 2025 Notes are not listed and have a par value of $25.00 per note. On July 9, 2025, we repaid $5.0 million in aggregate principal amount of the issued and outstanding 7.75% 2025 Notes.

6.25% 2027 Notes

On December 29, 2020, we issued $5.0 million in aggregate principal amount of our 6.25% fixed-rate notes due in 2027 (the "6.25% 2027 Notes"). Offering costs incurred were approximately $0.1 million. Interest on the 6.25% 2027 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 6.25% per year. The 6.25% 2027 Notes mature on December 29, 2027 and may be redeemed in whole or in part at any time or from time to time at our option, on or after December 29, 2024. The net proceeds from the offering were used for general corporate purposes in accordance with our investment objective and strategies. Financing costs of $0.1 million related to the 6.25% 2027 Notes have been capitalized and are being amortized over the term of the Notes.

On January 28, 2021, we issued an additional $10.0 million in aggregate principal amount of the 6.25% 2027 Notes for net proceeds of $9.7 million after deducting underwriting commissions of approximately $0.3 million (the "Additional 6.25% 2027 Notes"). The Additional 6.25% 2027 Notes are treated as a single series with the existing 6.25% 2027 Notes under the indenture and have the same terms as the existing 6.25% 2027 Notes. Offering costs incurred were approximately $0.1 million. Interest on the 6.25% 2027 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 6.25% per year. The 6.25% 2027 Notes mature on January 28, 2027 and commencing January 28, 2023, may be redeemed in whole or in part at any time or from time to time at our option. The net proceeds from the offering were used for general corporate purposes in accordance with our investment objective and strategies. Financing costs of $0.4 million related to the 6.25% 2027 Notes have been capitalized and are being amortized over the term of the 6.25% 2027 Notes. The 6.25% 2027 Notes are not listed and have a par value of $25.00 per note.

At August 31, 2025, the total amount of 6.25% 2027 Notes outstanding was $15.0 million.

4.375% 2026 Notes

On March 10, 2021, we issued $50.0 million in aggregate principal amount of the 4.375% notes due 2026 (the "4.375% 2026 Notes") for net proceeds of $49.0 million after deducting underwriting commissions of approximately $1.0 million. Offering costs incurred were approximately $0.3 million. Interest on the 4.375% 2026 Notes is paid semi-annually in arrears on February 28 and August 28, at a rate of 4.375% per year. The 4.375% 2026 Notes mature on February 28, 2026 and may be redeemed in whole or in part at any time on or after November 28, 2025 at par plus a "make-whole" premium, and thereafter at par. The net proceeds from the offering were used for general corporate purposes in accordance with our investment objective and strategies. Financing costs of $1.3 million related to the 4.375% 2026 Notes have been capitalized and are being amortized over the term of the 4.375% 2026 Notes.

On July 15, 2021, we issued an additional $125.0 million in aggregate principal amount of the 4.375% 2026 Notes (the "Additional 4.375% 2026 Notes") for net proceeds for approximately $123.5 million, based on the public offering price of 101.00% of the aggregate principal amount of the Additional 4.375% 2026 Notes, after deducting the underwriting discount of $2.5 million and the offering expenses of approximately $0.2 million payable by us. The net proceeds from the offering were used to redeem all of the outstanding 6.25% 2025 Notes (as described above), and for general corporate purposes in accordance with our investment objective and strategies. The Additional 4.375% 2026 Notes are treated as a single series with the existing 4.375% 2026 Notes under the indenture and have the same terms as the existing 4.375% 2026 Notes.

At August 31, 2025, the total amount of 4.375% 2026 Notes outstanding was $175.0 million.

4.35% 2027 Notes

On January 19, 2022, we issued $75.0 million in aggregate principal amount of our 4.35% fixed-rate Notes due in 2027 (the "4.35% 2027 Notes") for net proceeds of $73.0 million, based on the public offering price of 99.317% of the aggregate principal amount of the 4.35% 2027 Notes, after deducting the underwriting commissions of approximately $1.5 million. Offering costs incurred were approximately $0.3 million. Interest on the 4.35% 2027 Notes is paid semi-annually in arrears on February 28 and August 28, at a rate of 4.35% per year. The 4.35% 2027 Notes mature on February 28, 2027 and may be redeemed in whole or in part at our option at any time prior to November 28, 2026, at par plus a "make-whole" premium, and thereafter at par. The net proceeds from the offering were used for general corporate purposes in accordance with our investment objective and strategies. Financing costs of $1.8 million related to the 4.35% 2027 Notes have been capitalized and are being amortized over the term of the 4.35% 2027 Notes.

At August 31, 2025 the total amount of 4.35% 2027 Notes outstanding was $75.0 million.

6.00% 2027 Notes

On April 27, 2022, we issued $87.5 million in aggregate principal amount of 6.00% fixed-rate notes due 2027 (the "6.00% 2027 Notes") for net proceeds of $84.8 million after deducting underwriting commissions of approximately $2.7 million. Offering costs incurred were approximately $0.1 million. On May 10, 2022, the underwriters partially exercised their option to purchase an additional $10.0 million in aggregate principal amount of the 6.00% 2027 Notes. Net proceeds were $9.7 million after deducting underwriting commissions of approximately $0.3 million. Interest on the 6.00% 2027 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 6.00% per year. The 6.00% 2027 Notes mature on April 30, 2027 and commencing April 27, 2024, may be redeemed in whole or in part at any time or from time to time at our option. The net proceeds from the offering were used for general corporate purposes in accordance with our investment objective and strategies. Financing costs of $3.3 million related to the 6.00% 2027 Notes have been capitalized and are being amortized over the term of the 6.00% 2027 Notes. The 6.00% 2027 Notes are listed on the NYSE under the trading symbol "SAT" with a par value of $25.00 per note.

On August 15, 2022, we issued an additional $8.0 million in aggregate principal amount of the 6.00% 2027 Notes (the "Additional 6.00% 2027 Notes") for net proceeds of $7.8 million, based on the public offering price of 97.80% of the aggregate principal amount of the 6.00% 2027 Notes. The Additional 6.00% 2027 Notes are treated as a single series with the existing 6.00% 2027 Notes under the indenture and have the same terms as the existing 6.00% 2027 Notes. The net proceeds from the offering were used for general corporate purposes in accordance with our investment objective and strategies. Additional offering costs incurred were approximately $0.02 million. Additional financing costs of $0.03 million related to the 6.00% 2027 Notes have been capitalized and are being amortized over the term of the 6.00% 2027 Notes.

At August 31, 2025 the total amount of 6.00% 2027 Notes outstanding was $105.5 million.

7.00% 2025 Notes

On September 8, 2022, we issued $12.0 million in aggregate principal amount of 7.00% fixed-rate notes due 2025 (the "7.00% 2025 Notes") for net proceeds of $11.6 million after deducting underwriting discounts of approximately $0.4 million. Interest on the 7.00% 2025 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 7.00% per year. The 7.00% 2025 Notes mature on September 8, 2025 and commencing September 8, 2024, may be redeemed in whole or in part at any time or from time to time at our option. The net proceeds from the offering were used for general corporate purposes in accordance with our investment objective and strategies. Financing costs of $0.05 million related to the 7.00% 2025 Notes have been capitalized and are being amortized over the term of the 7.00% 2025 Notes.

At August 31, 2025 the total amount of 7.00% 2025 Notes outstanding was $12.0 million.

8.00% 2027 Notes

On October 27, 2022, we issued $40.0 million in aggregate principal amount of our 8.00% fixed-rate notes due 2027 (the "8.00% 2027 Notes") for net proceeds of $38.7 million after deducting underwriting commissions of approximately $1.3 million. Offering costs incurred were approximately $0.2 million. On November 10, 2022, the underwriters partially exercised their option to purchase an additional $6.0 million in aggregate principal amount of the 8.00% 2027 Notes. Net proceeds were $5.8 million after deducting underwriting commissions of approximately $0.2 million. Interest on the 8.00% 2027 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 8.00% per year. The 8.00% 2027 Notes mature on October 31, 2027 and commencing October 27, 2024, may be redeemed in whole or in part at any time or from time to time at our option. The net proceeds from the offering were used for general corporate purposes in accordance with our investment objective and strategies. Financing costs of $1.73 million related to the 8.00% 2027 Notes have been capitalized and are being amortized over the term of the 8.00% 2027 Notes. The 8.00% 2027 Notes are listed on the NYSE under the trading symbol "SAJ" with a par value of $25.00 per note.

At August 31, 2025 the total amount of 8.00% 2027 Notes outstanding was $46.0 million.

8.125% 2027 Notes

On December 13, 2022, we issued $52.5 million in aggregate principal amount of 8.125% fixed-rate notes due 2027 (the "8.125% 2027 Notes") for net proceeds of $50.8 million after deducting underwriting commissions of approximately $1.6 million. Offering costs incurred were approximately $0.1 million. On December 21, 2022, the underwriters fully exercised their option to purchase an additional $7.875 million in aggregate principal amount of the 8.125% 2027 Notes. Net proceeds were $7.6 million after deducting underwriting commissions of approximately $0.2 million. Interest on the 8.125% 2027 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 8.125% per year. The 8.125% 2027 Notes mature on December 31, 2027 and commencing December 13, 2024, may be redeemed in whole or in part at any time or from time to time at our option. The net proceeds from this offering were used to make investments in middle-market companies (including investments made through our SBIC subsidiaries) in accordance with our investment objective and strategies and for general corporate purposes. Financing costs of $2.0 million related to the 8.125% 2027 Notes have been capitalized and are being amortized over the term of the 8.125% 2027 Notes. The 8.125% 2027 Notes are listed on the NYSE under the trading symbol "SAY" with a par value of $25.00 per note.

At August 31, 2025, the total amount of 8.125% 2027 Notes outstanding was $60.4 million.

8.75% 2025 Notes

On March 31, 2023, we issued $10.0 million in aggregate principal amount of 8.75% fixed-rate notes due 2024 (the "8.75% 2025 Notes") for net proceeds of $9.7 million after deducting underwriting discounts of approximately $0.4 million. On May 1, 2023, we issued an additional $10.0 million in aggregate principal amount of the 8.75% 2024 Notes for net proceeds of $9.7 million after deducting underwriting discounts of approximately $0.4 million. Offering costs incurred were approximately $0.03 million. Interest on the 8.75% 2025 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 8.75% per year. On February 2, 2024, pursuant to the terms of the indenture governing the 8.75% 2025 Notes, we elected to exercise our option to extend the maturity date of the 8.75% 2025 Notes from March 31, 2024 to March 31, 2025. Net proceeds from this offering were used to make investments in middle-market companies (including investments made through our SBIC Subsidiaries) in accordance with our investment objective and strategies and general corporate purposes. Financing costs and discounts of $0.7 million related to the 8.75% 2025 Notes have been capitalized and are being amortized over the term of the 8.75% 2025 Notes. On March 31, 2025, we repaid $20.0 million in aggregate principal amount of the issued and outstanding 8.75% 2025 Notes.

8.50% 2028 Notes

On April 14, 2023, we issued $50.0 million in aggregate principal amount of 8.50% fixed-rate notes due 2028 (the "8.50% 2028 Notes") for net proceeds of $48.4 million after deducting underwriting commissions of approximately $1.6 million. Offering costs incurred were approximately $0.03 million. On April 26, 2023, the underwriters fully exercised their option to purchase an additional $7.5 million in aggregate principal amount of the 8.50% 2028 Notes. Net proceeds were $7.3 million after deducting underwriting commissions of approximately $0.2 million. Interest on the 8.50% 2028 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 8.50% per year. The 8.50% 2028 Notes mature on April 15, 2028, and commencing April 14, 2025, may be redeemed in whole or in part at any time or from time to time at our option. Net proceeds from this offering were used to repay a portion of the outstanding indebtedness under the Encina Credit Facility, make investments in middle-market companies (including investments made through our SBIC Subsidiaries) in accordance with our investment objective and strategies and for general corporate purposes. Financing costs of $2.0 million related to the 8.50% 2028 Notes have been capitalized and are being amortized over the term of the 8.50% 2028 Notes. The 8.50% 2028 Notes are listed on the NYSE under the trading symbol "SAZ" with a par value of $25.00 per note.

At August 31, 2025, the total amount of 8.50% 2028 Notes outstanding was $57.5 million.

At August 31, 2025 and February 28, 2025, the fair value of investments, cash and cash equivalents and cash and cash equivalents, reserve accounts were as follows:

		August 31, 2025								February 28, 2025
		Fair Value				Percentage of Total				Fair Value				Percentage of Total
		($ in thousands)
Cash and cash equivalents		$	105,660				8.8	%		$	148,218				12.6	%
Cash and cash equivalents, reserve accounts			95,145				8.0				56,505				4.8
First lien term loans			839,483				70.1				867,866				73.4
Second lien term loans			6,826				0.6				6,388				0.5
Structured finance securities			16,790				1.4				14,772				1.2
Unsecured loan			53,351				4.5				16,534				1.4
Equity interests			78,845				6.6				72,518				6.1
Total		$	1,196,100				100.0	%		$	1,182,801				100.0	%

Equity Capital Activities

Share Repurchases

On September 24, 2014, we announced the approval of the Share Repurchase Plan. Since September 24, 2014, the Share Repurchase Plan has been extended annually, and we have periodically increased the amount of shares of common stock that may be purchased under the Share Repurchase Plan. Most recently, on January 7, 2025, our board of directors extended the Share Repurchase Plan for another year to January 15, 2026, which currently permits up to 1.7 million shares of common stock to be repurchased under the Share Repurchase Plan. As of August 31, 2025, we purchased 1,035,203 shares of common stock, at the average price of $22.05 for approximately $22.8 million pursuant to the Share Repurchase Plan. During the three and six months ended August 31, 2025, we did not purchase any shares pursuant to the Share Repurchase Plan.

Public Equity Offering

On July 13, 2018, we issued 1,150,000 shares of common stock priced at $25.00 per share (par value $0.001 per share) at an aggregate total of $28.75 million. The net proceeds, after deducting underwriting commissions of $1.15 million and offering costs of approximately $0.2 million, amounted to approximately $27.4 million. We also granted the underwriters a 30-day option to purchase up to an additional 172,500 shares of common stock, which was not exercised.

Equity ATM Program

On March 16, 2017, we entered into an equity distribution agreement with Ladenburg Thalmann & Co. Inc. ("Ladenburg"), through which we may offer for sale, from time to time, up to $30.0 million of our common stock through an ATM offering. Subsequent to this, we amended our equity distribution agreement to add BB&T Capital Markets and B. Riley FBR, Inc. as sales agents in our ATM offering. On July 11, 2019, the amount of the common stock to be offered was increased to $70.0 million, and on October 8, 2019, the amount of the common stock to be offered was increased to $130.0 million. This agreement was terminated as of July 29, 2021, and as of that date, we had sold 3,922,018 shares for gross proceeds of $97.1 million at an average price of $24.77 for aggregate net proceeds of $95.9 million (net of transaction costs).

On July 30, 2021, we entered into an equity distribution agreement (the "Equity Distribution Agreement") with Ladenburg and Compass Point Research and Trading, LLC ("Compass Point"), each as distribution agents, through which we may offer for sale, from time to time, up to $150.0 million of our common stock through the Agents (as defined below), or to them, as principal for their account (the "ATM Program").

On July 6, 2023, we amended the Equity Distribution Agreement to increase the maximum amount of shares of our common stock to be sold through the ATM Program to $300.0 million from $150.0 million On July 19, 2023, we amended the Equity Distribution Agreement to add an additional distribution agent, Raymond James & Associates, Inc. ("Raymond James"). On May 15, 2024, we amended the Equity Distribution Agreement to add an additional distribution agent, Lucid Capital Markets, LLC ("Lucid" and together with Ladenburg, Compass Point, and Raymond James, the "Agents"). The sales price per share of our common stock offered under the ATM Program, less the Agents' commission, will not be less than the NAV per share of our common stock at the time of such a sale. Consistent with the terms of the ATM Program, the Manager may, from time to time and in its sole discretion, contribute proceeds necessary to ensure that no sales are made at a price below the then-current NAV per share.

As of August 31, 2025, we sold 8,532,953 shares for gross proceeds of $225.7 million at an average price of $26.37 for aggregate net proceeds of $224.0 million (net of transaction costs). During the three months ended August 31, 2025, we sold 443,406 shares for gross proceeds of $11.4 million at an average price of $25.61 for aggregate net proceeds of $11.4 million (net of transaction costs). During the six months ended August 31, 2025, we sold 688,237 shares for gross proceeds of $17.8 million at an average price of $25.86 for aggregate net proceeds of $17.8 million (net of transaction costs).

Dividend Distributions

We have distributed or intend to distribute sufficient dividends to eliminate taxable income for our completed tax years. If we fail to satisfy the 90% distribution requirement or otherwise fail to qualify as a RIC in any tax year, we would be subject to U.S. federal income tax in that year on all of our taxable income imposed at corporate rates, regardless of whether we made any distributions to our shareholders. Shareholders have the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant to the DRIP. Our distributions from August 31, 2025 to inception were as follows:

Payment date		Cash Dividend
Tax Year Ended February 28, 2026
September 24, 2025			0.25	(55)
August 21, 2025			0.25	(54)
July 24, 2025			0.25	(53)
June 24, 2025			0.25	(52)
May 22, 2025			0.25	(51)
April 24, 2025			0.25	(50)
March 25, 2025			0.74	(49)
		$	2.24
Tax Year Ended February 28, 2025
December 19, 2024		$	1.09	(48)
September 26, 2024			0.74	(47)
June 27, 2024			0.74	(46)
March 28, 2024			0.73	(45)
		$	3.30
Tax Year Ended February 29, 2024
December 28, 2023		$	0.72	(44)
September 28, 2023			0.71	(43)
June 29, 2023			0.70	(42)
March 30, 2023			0.69	(1)
		$	2.82
Tax Year Ended February 28, 2023
January 4, 2023		$	0.68	(2)
September 29, 2022			0.54	(3)
June 29, 2022			0.53	(4)
March 28, 2022			0.53	(5)
		$	2.28
Tax Year Ended February 28, 2022
January 19, 2022		$	0.53	(6)
September 28, 2021			0.52	(7)
June 29, 2021			0.44	(8)
April 22, 2021			0.43	(9)
		$	1.92
Tax Year Ended February 28, 2021
February 10, 2021		$	0.42	(10)
November 10, 2020			0.41	(11)
August 12, 2020			0.40	(12)
		$	1.23
Tax Year Ended February 29, 2020
February 6, 2020		$	0.56	(13)
September 26, 2019			0.56	(14)
June 27, 2019			0.55	(15)
March 28, 2019			0.54	(16)
		$	2.21

Payment date		Cash Dividend
Tax Year Ended February 28, 2019
January 2, 2019		$	0.53	(17)
September 27, 2018			0.52	(18)
June 27, 2018			0.51	(19)
March 26, 2018			0.50	(20)
		$	2.06
Tax Year Ended February 28, 2018
December 27, 2017		$	0.49	(21)
September 26, 2017			0.48	(22)
June 27, 2017			0.47	(23)
March 28, 2017			0.46	(24)
		$	1.90
Tax Year Ended February 28, 2017
February 9, 2017		$	0.45	(25)
November 9, 2016			0.44	(26)
September 5, 2016			0.20	(27)
August 9, 2016			0.43	(28)
April 27, 2016			0.41	(29)
		$	1.93
Tax Year Ended February 29, 2016
February 29, 2016		$	0.40	(30)
November 30, 2015			0.36	(31)
August 31, 2015			0.33	(32)
June 5, 2015			1.00	(33)
May 29. 2015			0.27	(34)
		$	2.36
Tax Year Ended February 28, 2015
February 27, 2015		$	0.22	(35)
November 28, 2014			0.18	(36)
		$	0.40
Tax Year Ended February 28. 2014
December 27, 2013		$	2.65	(37)
		$	2.65
Tax Year Ended February 28, 2013
December 31, 2012		$	4.25	(38)
		$	4.25
Tax Year Ended February 29, 2012
December 30, 2011		$	3.00	(39)
		$	3.00
Tax Year Ended February 28, 2011
December 29, 2010		$	4.40	(40)
		$	4.40
Tax Year Ended February 28, 2010
December 31, 2009		$	18.25	(41)
		$	18.25

(1)

Based on shareholder elections, the dividend consisted of approximately $7.1 million in cash and 45,818 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $23.11 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on March 17, 20, 21, 22, 23, 24, 27, 28, 29, and 30, 2023.

(2)

Based on shareholder elections, the dividend consisted of approximately $6.8 million in cash and 53,615 newly issued shares of common stock, or 0.5% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $24.26 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on December 20, 21, 22, 23, 27, 28, 29 and 30 2022 and January 3 and 4, 2023.

(3)	Based on shareholder elections, the dividend consisted of approximately $5.3 million in cash and 52,312 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $22.00 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on September 16, 19, 20, 21, 22, 23, 26, 27, 28 and 29, 2022.
(4)	Based on shareholder elections, the dividend consisted of approximately $5.1 million in cash and 48,590 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $22.40 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on June 15, 16, 17, 21, 22, 23, 24, 27, 28 and 29, 2022.
(5)	Based on shareholder elections, the dividend consisted of approximately $5.3 million in cash and 42,825 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $25.89 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on March 15, 16, 17, 18, 21, 22, 23, 24, 25 and 28, 2022.
(6)	Based on shareholder elections, the dividend consisted of approximately $5.3 million in cash and 41,520 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $26.85 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on January 5, 6, 7, 10, 11, 12, 13, 14, 18 and 19, 2022.

(7)

Based on shareholder elections, the dividend consisted of approximately $4.9 million in cash and 38,016 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $26.77 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on September 15, 16, 17, 20, 21, 22, 23, 24, 27 and 28, 2021.

(8)

Based on shareholder elections, the dividend consisted of approximately $4.1 million in cash and 33,100 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $25.03 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on June 16, 17, 18, 21, 22, 23, 24, 25, 28 and 29, 2021.

(9)

Based on shareholder elections, the dividend consisted of approximately $3.9 million in cash and 38,580 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $23.69 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on April 9,12, 13, 14, 15, 16, 19, 20, 21 and 22, 2021.

(10)

Based on shareholder elections, the dividend consisted of approximately $3.8 million in cash and 41,388 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $21.75 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on January 28, 29 and February 1, 2, 3, 4, 5, 8, 9 and 10, 2021.

(11)

Based on shareholder elections, the dividend consisted of approximately $3.8 million in cash and 45,706 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $17.63 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on October 28, 29, 30 and November 2, 3, 4, 5, 6, 9 and 10, 2020.

(12)

Based on shareholder elections, the dividend consisted of approximately $3.7 million in cash and 47,098 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $16.45 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on July 30, 31 and August 3, 4, 5, 6, 7, 10, 11 and 12, 2020.

(13)

Based on shareholder elections, the dividend consisted of approximately $5.4 million in cash and 35,682 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $25.44 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on January 24, 27, 28, 29, 30, 31 and February 3, 4, 5 and 6, 2020.

(14)

Based on shareholder elections, the dividend consisted of approximately $4.5 million in cash and 34,575 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $23.34 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on September 13, 16, 17, 18, 19, 20, 23, 24, 25 and 26, 2019.

(15)

Based on shareholder elections, the dividend consisted of approximately $3.6 million in cash and 31,545 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $22.65 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on June 14, 17, 18, 19, 20, 21, 24, 25, 26 and 27, 2019.

(16)

Based on shareholder elections, the dividend consisted of approximately $3.5 million in cash and 31,240 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $21.36 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on March 15, 18, 19, 20, 21, 22, 25, 26, 27 and 28, 2019.

(17)

Based on shareholder elections, the dividend consisted of approximately $3.4 million in cash and 30,796 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $18.88 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on December 18, 19, 20, 21, 24, 26, 27, 28, 31, 2018 and January 2, 2019.

(18)

Based on shareholder elections, the dividend consisted of approximately $3.3 million in cash and 25,862 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $22.35 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on September 14, 17, 18, 19, 20, 21, 24, 25, 26 and 27, 2018.

(19)

Based on shareholder elections, the dividend consisted of approximately $2.7 million in cash and 21,562 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $23.72 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on June 14, 15, 18, 19, 20, 21, 22, 25, 26 and 27, 2018.

(20)

Based on shareholder elections, the dividend consisted of approximately $2.6 million in cash and 25,354 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $19.91 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on March 13, 14, 15, 16, 19, 20, 21, 22, 23 and 26, 2018.

(21)	Based on shareholder elections, the dividend consisted of approximately $2.5 million in cash and 25,435 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $21.14 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on December 13, 14, 15, 18, 19, 20, 21, 22, 26 and 27, 2017.
(22)	Based on shareholder elections, the dividend consisted of approximately $2.2 million in cash and 33,551 newly issued shares of common stock, or 0.6% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $20.19 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on September 13, 14, 15, 18, 19, 20, 21, 22, 25 and 26, 2017.
(23)	Based on shareholder elections, the dividend consisted of approximately $2.3 million in cash and 26,222 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $20.04 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on June 14, 15, 16, 19, 20, 21, 22, 23, 26 and 27, 2017.

(24)

Based on shareholder elections, the dividend consisted of approximately $2.0 million in cash and 29,096 newly issued shares of common stock, or 0.5% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $21.38 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on March 15, 16, 17, 20, 21, 22, 23, 24, 27 and 28, 2017.

(25)

Based on shareholder elections, the dividend consisted of approximately $1.6 million in cash and 50,453 newly issued shares of common stock, or 0.9% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $20.25 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on January 27, 30, 31 and February 1, 2, 3, 6, 7, 8 and 9, 2017.

(26)	Based on shareholder elections, the dividend consisted of approximately $1.5 million in cash and 58,548 newly issued shares of common stock, or 1.0% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $17.12 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on October 27, 28, 31 and November 1, 2, 3, 4, 7, 8 and 9, 2016.
(27)	Based on shareholder elections, the dividend consisted of approximately $0.7 million in cash and 24,786 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $17.06 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on August 22, 23, 24, 25, 26, 29, 30, 31 and September 1 and 2, 2016.
(28)	Based on shareholder elections, the dividend consisted of approximately $1.5 million in cash and 58,167 newly issued shares of common stock, or 1.0% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $16.32 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on July 27, 28, 29 and August 1, 2, 3, 4, 5, 8 and 9, 2016.
(29)	Based on shareholder elections, the dividend consisted of approximately $1.5 million in cash and 56,728 newly issued shares of common stock, or 1.0% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $15.43 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on April 14, 15, 18, 19, 20, 21, 22, 25, 26 and 27, 2016.
(30)	Based on shareholder elections, the dividend consisted of approximately $1.4 million in cash and 66,765 newly issued shares of common stock, or 1.2% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $13.11 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on February 16, 17, 18, 19, 22, 23, 24, 25, 26 and 29, 2016.

(31)	Based on shareholder elections, the dividend consisted of approximately $1.1 million in cash and 61,029 newly issued shares of common stock, or 1.1% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $14.53 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on November 16, 17, 18, 19, 20, 23, 24, 25, 27 and 30, 2015.
(32)	Based on shareholder elections, the dividend consisted of approximately $1.1 million in cash and 47,861 newly issued shares of common stock, or 0.9% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $15.28 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on August 18, 19, 20, 21, 24, 25, 26, 27, 28 and 31, 2015.
(33)	Based on shareholder elections, the dividend consisted of approximately $3.4 million in cash and 126,230 newly issued shares of common stock, or 2.3% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $16.47 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on May 22, 26, 27, 28, 29 and June 1, 2, 3, 4, and 5, 2015.
(34)	Based on shareholder elections, the dividend consisted of approximately $0.9 million in cash and 33,766 newly issued shares of common stock, or 0.6% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $16.78 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on May 15, 18, 19, 20, 21, 22, 26, 27, 28 and 29, 2015.
(35)	Based on shareholder elections, the dividend consisted of approximately $0.8 million in cash and 26,858 newly issued shares of common stock, or 0.5% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $14.97 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on February 13, 17, 18, 19, 20, 23, 24, 25, 26 and 27, 2015.
(36)	Based on shareholder elections, the dividend consisted of approximately $0.6 million in cash and 22,283 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $14.37 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on November 14, 17, 18, 19, 20, 21, 24, 25, 26 and 28, 2014.

(37)	Based on shareholder elections, the dividend consisted of approximately $2.5 million in cash and 649,500 shares of common stock, or 13.7% of our outstanding common stock prior to the dividend payment. The amount of cash elected to be received was greater than the cash limit of 20.0% of the aggregate dividend amount, thus resulting in the payment of a combination of cash and stock to shareholders who elected to receive cash. The number of shares of common stock comprising the stock portion was calculated based on a price of $15.439 per share, which equaled the volume weighted average trading price per share of the common stock on December 11, 13 and 16, 2013.
(38)	Based on shareholder elections, the dividend consisted of $3.3 million in cash and 853,455 shares of common stock, or 22.0% of our outstanding common stock prior to the dividend payment. The amount of cash elected to be received was greater than the cash limit of 20.0% of the aggregate dividend amount, thus resulting in the payment of a combination of cash and stock to shareholders who elected to receive cash. The number of shares of common stock comprising the stock portion was calculated based on a price of $15.444 per share, which equaled the volume weighted average trading price per share of the common stock on December 14, 17 and 19, 2012.
(39)	Based on shareholder elections, the dividend consisted of $2.0 million in cash and 599,584 shares of common stock, or 18.0% of our outstanding common stock prior to the dividend payment. The amount of cash elected to be received was greater than the cash limit of 20.0% of the aggregate dividend amount, thus resulting in the payment of a combination of cash and stock to shareholders who elected to receive cash. The number of shares of common stock comprising the stock portion was calculated based on a price of $13.117067 per share, which equaled the volume weighted average trading price per share of the common stock on December 20, 21 and 22, 2011.
(40)	Based on shareholder elections, the dividend consisted of $1.2 million in cash and 596,235 shares of common stock, or 22.0% of our outstanding common stock prior to the dividend payment. The amount of cash elected to be received was greater than the cash limit of 10.0% of the aggregate dividend amount, thus resulting in the payment of a combination of cash and stock to shareholders who elected to receive cash. The number of shares of common stock comprising the stock portion was calculated based on a price of $17.8049 per share, which equaled the volume weighted average trading price per share of the common stock on December 20, 21 and 22, 2010.
(41)	Based on shareholder elections, the dividend consisted of $2.1 million in cash and 864,872 shares of common stock, or 104.0% of our outstanding common stock prior to the dividend payment. The amount of cash elected to be received was greater than the cash limit of 13.7% of the aggregate dividend amount, thus resulting in the payment of a combination of cash and stock to shareholders who elected to receive cash. The number of shares of common stock comprising the stock portion was calculated based on a price of $1.5099 per share, which equaled the volume weighted average trading price per share of the common stock on December 24 and 28, 2009.

(42)	Based on shareholder elections, the dividend consisted of approximately $7.6 million in cash and 29,627 newly issued shares of common stock, or 0.2% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $25.29 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on June 15, 16, 20, 21, 22, 23, 26, 27, 28, and 29, 2023.
(43)	Based on shareholder elections, the dividend consisted of approximately $8.4 million in cash and 35,196 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $24.41 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on September 15, 18, 19, 20, 21, 22, 25, 26, 27, and 28, 2023.
(44)	Based on shareholder elections, the dividend consisted of approximately $8.9 million in cash and 37,394 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $24.47 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on December 14, 15, 18, 19, 20, 21, 22, 26, 27, and 28, 2023.

(45)	Based on shareholder elections, the dividend consisted of approximately $9.0 million in cash and 45,490 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $22.85 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on March 15, 18, 19, 20, 21, 22, 25, 26, 27, and 28, 2024.
(46)	Based on shareholder elections, the dividend consisted of approximately $9.1 million in cash and 46,803 newly issued shares of common stock, or 10.0% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $21.76 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on June 13, 14, 17, 18, 20, 21, 24, 25, 26, and 27, 2024.
(47)	Based on shareholder elections, the dividend consisted of approximately $9.0 million in cash and 54,999 newly issued shares of common stock, or 10.0% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $22.08 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on September 13, 16, 17, 18, 19, 20, 23, 24, 25, and 26, 2024.
(48)	Based on shareholder elections, the dividend consisted of approximately $13.7 million in cash and 81,471 newly issued shares of common stock, or 11.9% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $22.80 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on December 6, 9, 10, 11, 12, 13, 16, 17, 18, and 19, 2024.
(49)	Based on shareholder elections, the dividend consisted of approximately $9.9 million in cash and 60,611 newly issued shares of common stock, or 12.3% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $22.96 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on March 12, 13, 14, 17, 18, 19, 20, 21, 24, and 25, 2025.
(50)	Based on shareholder elections, the dividend consisted of approximately $3.4 million in cash and 20,086 newly issued shares of common stock, or 11.5% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $22.02 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on April 10, 11, 14, 15, 16, 17, 21, 22, 23, and 24, 2025.

(51)	Based on shareholder elections, the dividend consisted of approximately $3.4 million in cash and 20,784 newly issued shares of common stock, or 12.5% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $23.02 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on May 9, 12, 13, 14, 15, 16, 19, 20, 21, and 22, 2025.
(52)	Based on shareholder elections, the dividend consisted of approximately $3.4 million in cash and 19,750 newly issued shares of common stock, or 11.7% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $23.09 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on June 10, 11, 12, 13, 16, 17, 18, 20, 23, and 24, 2025.
(53)	Based on shareholder elections, the dividend consisted of approximately $3.5 million in cash and 17,443 newly issued shares of common stock, or 10.6% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $23.86 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on July 11, 14, 15, 16, 17, 18, 21, 22, 23 and 24, 2025.
(54)	Based on shareholder elections, the dividend consisted of approximately $3.6 million in cash and 17,320 newly issued shares of common stock, or 10.5% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $24.11 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on August 8, 11, 12, 13, 14, 15, 18, 19, 20 and 21, 2025.
(55)	Based on shareholder elections, the dividend consisted of approximately $3.6 million in cash and 17,673 newly issued shares of common stock, or 10.3% of our outstanding common stock prior to the dividend payment. The number of shares of common stock comprising the stock portion was calculated based on a price of $23.32 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on September 11, 12, 15, 16, 17, 18, 19, 22, 23 and 24, 2025.

We cannot provide any assurance that these measures will provide sufficient sources of liquidity to support our operations and growth.

Our asset coverage ratio, as defined in the 1940 Act, was 166.6% as of August 31, 2025 and 162.9% as of February 28, 2025.

Subsequent Events

On September 24, 2025, the Company completed the first refinancing of the Saratoga Investment Corp. Senior Loan Fund 2022-1, Ltd. This refinancing, among other things, extended the Saratoga CLO investment period to October 2028. As part of this refinancing, the Company purchased $10.0 million of the SLF 2022-1 Class E Notes tranche at par. Concurrently, the existing $12.25 million of the SLF 2022-1 Class E Notes were repaid. The Company also paid $1.6 million of additional equity investment related to the refinancing to Saratoga Senior Loan Fund I JV LLC.

On September 11, 2025, the Company declared the following dividends for the quarter ended November 30, 2025. Shareholders have the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant to the DRIP.

Month		Amount per Share				Record Date		Payment Date
September 2025		$	0.25			October 7, 2025		October 23, 2025
October 2025		$	0.25			November 4, 2025		November 20, 2025
November 2025		$	0.25			December 2, 2025		December 18, 2025

Contractual obligations

The following table shows our payment obligations for repayment of debt and other contractual obligations at August 31, 2025:

						Payment Due by Period
Long-Term Debt Obligations		Total				Less Than 1 Year				1 - 3 Years				3 - 5 Years				More Than 5 Years
		($ in thousands)
Revolving credit facility		$	32,500			$	32,500			$	-			$	-			$	-
Live Oak credit facility			37,500				-				37,500				-				-
SBA debentures			170,000				-				-				20,000				150,000
7.00% 2025 Notes			12,000				12,000				-				-				-
4.375% 2026 Notes			175,000				175,000				-				-				-
4.35% 2027 Notes			75,000				-				75,000				-				-
6.25% 2027 Notes			15,000				-				15,000				-				-
6.00% 2027 Notes			105,500				-				105,500				-				-
8.00% 2027 Notes			46,000				-				46,000				-				-
8.125% 2027 Notes			60,375				-				60,375				-				-
8.5% 2028 Notes			57,500				-				57,500				-				-
Total Long-Term Debt Obligations		$	786,375			$	219,500			$	396,875			$	20,000			$	150,000

Off-balance sheet arrangements

As of August 31, 2025 and February 28, 2025, our off-balance sheet arrangements consisted of $96.2 million and $126.7 million, respectively, of unfunded commitments outstanding to provide debt financing to its portfolio companies or to fund limited partnership interests. Such commitments are generally up to our discretion to approve, or the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in our consolidated statements of assets and liabilities and are not reflected in our consolidated statements of assets and liabilities.

A summary of the unfunded commitments outstanding as of August 31, 2025 and February 28, 2025 is shown in the table below (dollars in thousands):

		August 31, 2025				February 28, 2025
At Company's discretion
ActiveProspect, Inc.		$	10,000			$	10,000
Artemis Wax Corp.			-				23,500
Ascend Software, LLC			-				5,000
C2 Educational Systems			-				2,000
Davisware, LLC			-				1,000
JDXpert			4,500				4,500
Lee's Famous Recipe Chicken			10,000				10,000
Pepper Palace, Inc.			1,200				1,200
Procurement Partners, LLC			-				-
Saratoga Senior Loan Fund I JV, LLC			8,548				8,548
VetnCare MSO, LLC			10,000				10,000
StockIQ Technologies, LLC			5,000				-
Total		$	49,248			$	75,748
At portfolio company's discretion - satisfaction of certain financial and nonfinancial covenants required
Axero Holdings, LLC - Revolver			500				500
Axiom Medical Consulting, LLC			1,000				1,500
BQE Software, Inc.			250				2,250
Cloudpermit Intermediate Holding Company			5,000				5,000
Davisware, LLC			-				1,750
Exigo, LLC - Revolver			625				625
Gen4 Dental Partners Holdings, LLC			2,381				2,857
Granite Comfort, LP			-				11,637
Innergy, Inc.			5,000				5,000
Inspect Point Holding, LLC			2,000				1,500
Modis Dental Partners OpCo, LLC			4,500				8,900
Pepper Palace, Inc. - Revolver			-				600
Stretch Zone Franchising, LLC			-				1,500
VetnCare MSO, LLC			6,709				7,319
StockIQ Technologies, LLC			2,000				-
SmartAC.com, Inc.			17,000				-
			46,965				50,938
Total		$	96,213			$	126,686

We believe our assets will provide adequate coverage to satisfy these unfunded commitments. As of August 31, 2025, we had cash and cash equivalents of $105.7 million and $32.5 million in available borrowings under the Encina Credit Facility, and $37.5 million in available borrowings under the Live Oak Credit Facility.