The Quarterly
GNV Q2 2017 10-Q

Saratoga Investment Corp (GNV) SEC Quarterly Report (10-Q) for Q3 2017

GNV Q4 2017 10-Q
GNV Q2 2017 10-Q GNV Q4 2017 10-Q
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended August 31, 2017

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

Commission File Number: 001-33376

SARATOGA INVESTMENT CORP.

(Exact name of registrant as specified in its charter)

Maryland 20-8700615

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

535 Madison Avenue

New York, New York

10022
(Address of principal executive office) (Zip Code)

(212) 906-7800

(Registrant's telephone number, including area code)

Not applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☐    No  ☐

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

Large Accelerated Filer Accelerated Filer
Non-Accelerated Filer Smaller Reporting Company
Emerging Growth Company

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

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

The number of shares of the registrant's common stock, $0.001 par value, outstanding as of October 11, 2017 was 6,003,834.

Table of Contents

TABLE OF CONTENTS

Page

PART I.

FINANCIAL INFORMATION 3
Item 1. Consolidated Financial Statements 3
Consolidated Statements of Assets and Liabilities as of August 31, 2017 (unaudited) and February 28, 2017 3
Consolidated Statements of Operations for the three and six months ended August 31, 2017 and August 31, 2016 (unaudited) 4
Consolidated Schedules of Investments as of August 31, 2017 (unaudited) and February 28, 2017 5
Consolidated Statements of Changes in Net Assets for the six months ended August 31, 2017 and August 31, 2016 (unaudited) 7
Consolidated Statements of Cash Flows for the six months ended August 31, 2017 and August 31, 2016 (unaudited) 8
Notes to Consolidated Financial Statements as of August 31, 2017 (unaudited) 9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 35
Item 3. Quantitative and Qualitative Disclosures About Market Risk 61
Item 4. Controls and Procedures 61
PART II. OTHER INFORMATION 62
Item 1. Legal Proceedings 62
Item 1A. Risk Factors 62
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 62
Item 3. Defaults Upon Senior Securities 62
Item 4. Mine Safety Disclosures 62
Item 5. Other Information 62
Item 6. Exhibits 63
Signatures 65

2

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

S aratoga Investment Corp.

Consolidated Statements of Assets and Liabilities

As of
August 31, 2017 February 28, 2017
(unaudited)

ASSETS

Investments at fair value

Non-control/Non-affiliate investments (amortized cost of $295,295,973 and $251,198,896, respectively)

$   289,721,139 $   242,531,514

Control investments (amortized cost of $38,327,248 and $49,283,536, respectively)

43,248,674 50,129,799

Total investments at fair value (amortized cost of $333,623,221 and $300,482,432, respectively)

332,969,813 292,661,313

Cash and cash equivalents

1,595,438 9,306,543

Cash and cash equivalents, reserve accounts

16,816,101 12,781,425

Interest receivable (net of reserve of $895,998 and $157,560, respectively)

3,773,660 3,294,450

Management and incentive fee receivable

255,134 171,106

Other assets

464,291 183,346

Receivable from unsettled trades

253,041 253,041

Total assets

$ 356,127,478 $ 318,651,224

LIABILITIES

Revolving credit facility

$ 10,000,000 $ -  

Deferred debt financing costs, revolving credit facility

(743,272 (437,183

SBA debentures payable

134,660,000 112,660,000

Deferred debt financing costs, SBA debentures payable

(2,794,750 (2,508,280

Notes payable

74,450,500 74,450,500

Deferred debt financing costs, notes payable

(2,513,115 (2,689,511

Base management and incentive fees payable

5,056,994 5,814,692

Accounts payable and accrued expenses

1,099,099 852,987

Interest and debt fees payable

3,038,528 2,764,237

Directors fees payable

60,500 51,500

Due to manager

353,386 397,505

Total liabilities

$ 222,667,870 $ 191,356,447

Commitments and contingencies (See Note 7)

NET ASSETS

Common stock, par value $.001, 100,000,000 common shares authorized, 5,967,272 and 5,794,600 common shares issued and outstanding, respectively

$ 5,967 $ 5,795

Capital in excess of par value

194,222,453 190,483,931

Distribution in excess of net investment income

(26,799,657 (27,737,348

Accumulated net realized loss from investments and derivatives

(33,315,747 (27,636,482

Accumulated net unrealized depreciation on investments and derivatives

(653,408 (7,821,119

Total net assets

133,459,608 127,294,777

Total liabilities and net assets

$ 356,127,478 $ 318,651,224

NET ASSET VALUE PER SHARE

$ 22.37 $ 21.97

See accompanying notes to consolidated financial statements.

3

Table of Contents

Saratoga Investment Corp.

Consolidated Statements of Operations

(unaudited)

For the three months
ended
August 31, 2017
For the three months
ended
August 31, 2016
For the six months
ended
August 31, 2017
For the six months
ended
August 31, 2016

INVESTMENT INCOME

Interest from investments

Non-control/Non-affiliate investments

$ 7,183,757 $ 6,561,838 $ 13,104,190 $ 13,181,951

Payment-in-kind interest income from Non-control/Non-affiliate investments

298,957 184,265 522,230 313,355

Control investments

1,496,080 557,200 2,831,466 1,089,326

Payment-in-kind interest income from Control investments

207,624 -   469,733 -  

Total interest income

9,186,418 7,303,303 16,927,619 14,584,632

Interest from cash and cash equivalents

6,493 6,401 13,574 10,187

Management fee income

375,957 374,657 751,638 748,341

Incentive fee income

162,358 -   267,653 -  

Other income

522,440 763,633 1,000,630 1,013,229

Total investment income

10,253,666 8,447,994 18,961,114 16,356,389

OPERATING EXPENSES

Interest and debt financing expenses

2,962,844 2,369,705 5,486,450 4,737,761

Base management fees

1,481,788 1,202,794 2,872,815 2,429,951

Professional fees

407,372 302,227 791,703 661,526

Administrator expenses

395,833 325,000 770,833 650,000

Incentive management fees

1,709,636 1,208,452 1,885,732 1,936,732

Insurance

66,165 70,658 132,330 141,316

Directors fees and expenses

60,000 60,422 111,000 126,422

General & administrative

287,201 304,955 484,444 517,164

Excise tax expense (credit)

(14,738 -   (14,738 -  

Other expense

6,514 -   45,045 13,187

Total operating expenses

7,362,615 5,844,213 12,565,614 11,214,059

NET INVESTMENT INCOME

2,891,051 2,603,781 6,395,500 5,142,330

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

Net realized gain (loss) from investments

Non-control/Non-affiliate investments

(5,838,408 5,936,750 (5,742,819 12,039,655

Control investments

63,554 -   63,554 -  

Net realized gain (loss) from investments

(5,774,854 5,936,750 (5,679,265 12,039,655

Net change in unrealized appreciation (depreciation) on investments

Non-control/Non-affiliate investments

7,129,782 (3,857,810 3,092,549 (9,794,258

Control investments

2,623,880 588,897 4,075,162 1,171,478

Net change in unrealized appreciation (depreciation) on investments

9,753,662 (3,268,913 7,167,711 (8,622,780

Net gain on investments

3,978,808 2,667,837 1,488,446 3,416,875

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

$ 6,869,859 $ 5,271,618 $ 7,883,946 $ 8,559,205

WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE

$ 1.15 $ 0.92 $ 1.33 $ 1.49

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED

5,955,251 5,740,816 5,908,453 5,739,157

See accompanying notes to consolidated financial statements.

4

Table of Contents

Saratoga Investment Corp.

Consolidated Schedule of Investments

August 31, 2017

(unaudited)

Company

Industry

Investment Interest Rate /

Maturity

Principal/
Number of
Shares
Cost Fair Value (c) % of
Net Assets

Non-control/Non-affiliated investments - 217.1% (b)

Tile Redi Holdings, LLC (d)

Building Products First Lien Term Loan (L+10.00%), 11.32% Cash, 6/16/2022 $ 15,000,000 $ 14,850,000 $ 14,850,000 11.1

Total Building Products 14,850,000 14,850,000 11.1

Apex Holdings Software Technologies, LLC

Business Services First Lien Term Loan (L+8.00%), 9.32% Cash, 9/21/2021 $ 18,000,000 17,871,194 18,000,000 13.5

Avionte Holdings, LLC (g)

Business Services Common Stock 100,000 100,000 363,000 0.3

BMC Software, Inc. (d)

Business Services Syndicated Loan (L+4.00%), 5.32% Cash, 9/10/2022 $ 4,871,232 4,825,630 4,829,339 3.6

CLEO Communications Holding, LLC

Business Services First Lien Term Loan (L+7.00%), 8.32% Cash/2.00% PIK, 3/31/2022 $ 13,088,335 12,964,508 12,957,452 9.7

CLEO Communications Holding, LLC (i)

Business Services Delayed Draw Term Loan (L+7.00%), 8.32% Cash/2.00% PIK, 3/31/2022 $ 2,000,000 1,980,000 1,980,000 1.5

Courion Corporation

Business Services Second Lien Term Loan (L+10.00%), 11.32% Cash, 6/1/2021 $ 15,000,000 14,890,921 14,313,000 10.7

Emily Street Enterprises, L.L.C.

Business Services Senior Secured Note (L+8.50%), 10.00% Cash, 1/23/2020 $ 3,300,000 3,292,667 3,321,450 2.5

Emily Street Enterprises, L.L.C. (g)

Business Services Warrant Membership Interests Expires 12/28/2022 49,318 400,000 523,757 0.4

Erwin, Inc.

Business Services Second Lien Term Loan (L+11.50%), 12.82% Cash/1.00% PIK, 8/28/2021 $ 13,176,840 13,075,070 13,176,840 9.9

FranConnect LLC (d)

Business Services First Lien Term Loan (L+7.00%), 8.50% Cash, 5/26/2022 $ 14,500,000 14,427,500 14,433,300 10.8

GreyHeller LLC

Business Services First Lien Term Loan
(L+11.00%), 12.32% Cash, 11/16/2021
$ 7,000,000 6,938,608 7,000,000 5.2

GreyHeller LLC (j)

Business Services Delayed Draw Term Loan B (L+11.00%), 12.32% Cash, 11/16/2021 $ -   -   -   0.0

GreyHeller LLC (g)

Business Services Common Stock 850,000 850,000 784,426 0.6
Help/Systems Holdings, Inc.
(Help/Systems, LLC)
Business Services First Lien Term Loan (L+4.50%), 5.82% Cash, 10/8/2021 $ 5,404,367 5,310,648 5,417,878 4.1
Help/Systems Holdings, Inc.
(Help/Systems, LLC)
Business Services Second Lien Term Loan (L+9.50%), 10.82% Cash, 10/8/2022 $ 3,000,000 2,927,863 2,937,600 2.2

Identity Automation Systems (g)

Business Services Common Stock Class A Units 232,616 232,616 578,283 0.4

Identity Automation Systems

Business Services First Lien Term Loan (L+9.50%), 10.82% Cash, 3/31/2021 $ 18,000,000 17,868,107 17,923,540 13.4

Knowland Technology Holdings, L.L.C.

Business Services First Lien Term Loan (L+8.75%), 10.07% Cash, 7/20/2021 $ 16,888,730 16,861,820 16,888,730 12.6

Microsystems Company

Business Services Second Lien Term Loan (L+10.00%), 11.32% Cash, 7/1/2022 $ 8,000,000 7,932,584 8,040,000 6.0

National Waste Partners (d)

Business Services Second Lien Term Loan 10.00% Cash, 2/13/2022 $ 9,000,000 8,910,000 8,959,500 6.7

Vector Controls Holding Co., LLC (d)

Business Services First Lien Term Loan 14.00% (12.00% Cash/2.00% PIK), 3/6/2018 $ 8,499,741 8,478,591 8,499,741 6.4

Vector Controls Holding Co., LLC (d), (g)

Business Services Warrants to Purchase Limited Liability Company Interests, Expires 5/31/2025 343 -   481,356 0.4

Total Business Services 160,138,327 161,409,192 120.9

Targus Holdings, Inc. (g)

Consumer Products Common Stock 210,456 1,791,242 279,920 0.2

Targus Holdings, Inc. (d)

Consumer Products Second Lien Term Loan A-2 15.00% PIK, 12/31/2019 $ 252,517 252,517 252,517 0.2

Targus Holdings, Inc. (d)

Consumer Products Second Lien Term Loan B 15.00% PIK, 12/31/2019 $ 757,149 757,150 757,149 0.6

Total Consumer Products 2,800,909 1,289,586 1.0

My Alarm Center, LLC

Consumer Services Preferred Equity Class A Units 8.00% PIK 2,227 2,226,560 2,250,310 1.7

My Alarm Center, LLC (g)

Consumer Services Preferred Equity Class B Units 1,797 1,796,880 1,773,130 1.3

My Alarm Center, LLC (g)

Consumer Services Common Stock 96,224 -   -   0.0

PrePaid Legal Services, Inc. (d)

Consumer Services First Lien Term Loan (L+5.25%), 6.57% Cash, 7/1/2019 $ 2,505,496 2,494,954 2,517,021 1.9

PrePaid Legal Services, Inc. (d)

Consumer Services Second Lien Term Loan (L+9.00%), 10.32% Cash, 7/1/2020 $ 11,000,000 10,970,916 11,028,600 8.3

Total Consumer Services 17,489,310 17,569,061 13.2

C2 Educational Systems (d)

Education First Lien Term Loan (L+8.50%), 10.00% Cash, 5/31/2020 $ 16,000,000 15,844,735 15,851,200 11.9

M/C Acquisition Corp., L.L.C. (g)

Education Class A Common Stock 544,761 30,241 -   0.0

M/C Acquisition Corp., L.L.C. (g)

Education First Lien Term Loan 1.00% Cash, 3/31/2018 $ 2,318,121 1,190,838 6,320 0.0

Texas Teachers of Tomorrow, LLC (g), (h)

Education Common Stock 750,000 750,000 910,433 0.7

Texas Teachers of Tomorrow, LLC

Education Second Lien Term Loan (L+9.75%), 11.07% Cash, 6/2/2021 $ 10,000,000 9,926,400 10,000,000 7.5

Total Education 27,742,214 26,767,953 20.1

TM Restaurant Group L.L.C. (g)

Food and Beverage First Lien Term Loan 14.50% PIK, 10/24/2017 $ 9,358,694 9,355,564 7,996,068 6.0

TM Restaurant Group L.L.C. (g)

Food and Beverage Revolver 14.50% PIK, 10/24/2017 $ 413,954 413,954 353,682 0.3

Total Food and Beverage 9,769,518 8,349,750 6.3

Censis Technologies, Inc.

Healthcare Services First Lien Term Loan B (L+10.00%), 11.32% Cash, 7/24/2019 $ 10,800,000 10,703,416 10,800,000 8.1

Censis Technologies, Inc. (g), (h)

Healthcare Services Limited Partner Interests 999 999,000 1,092,307 0.8

ComForCare Health Care

Healthcare Services First Lien Term Loan (L+8.50%), 9.82% Cash, 1/31/2022 $ 10,500,000 10,404,703 10,542,000 7.9

Roscoe Medical, Inc. (d), (g)

Healthcare Services Common Stock 5,081 508,077 583,679 0.4

Roscoe Medical, Inc.

Healthcare Services Second Lien Term Loan 11.25% Cash, 9/26/2019 $ 4,200,000 4,163,582 4,190,340 3.1

Ohio Medical, LLC (g)

Healthcare Services Common Stock 5,000 500,000 246,350 0.2

Ohio Medical, LLC

Healthcare Services Senior Subordinated Note 12.00% Cash, 7/15/2021 $ 7,300,000 7,244,377 6,515,980 4.9

Zest Holdings, LLC (d)

Healthcare Services Syndicated Loan (L+4.25%), 5.57% Cash, 8/16/2023 $ 4,126,569 4,048,135 4,150,503 3.1

Total Healthcare Services 38,571,290 38,121,159 28.5

HMN Holdco, LLC

Media First Lien Term Loan 12.00% Cash, 7/8/2021 $ 8,266,574 8,200,476 8,504,652 6.4

HMN Holdco, LLC

Media Delayed Draw First Lien Term Loan 12.00% Cash, 7/8/2021 $ 4,800,000 4,757,943 4,938,240 3.7

HMN Holdco, LLC (g)

Media Class A Series, Expires 1/16/2025 4,264 61,647 251,789 0.2

HMN Holdco, LLC (g)

Media Class A Warrant, Expires 1/16/2025 30,320 438,353 1,412,306 1.0

HMN Holdco, LLC (g)

Media Warrants to Purchase Limited Liability Company Interests (Common), Expires 5/16/2024 57,872 -   2,399,952 1.8

HMN Holdco, LLC (g)

Media Warrants to Purchase Limited Liability Company Interests (Preferred), Expires 5/16/2024 8,139 -   394,742 0.3

Total Media 13,458,419 17,901,681 13.4

Elyria Foundry Company, L.L.C. (g)

Metals Common Stock 60,000 9,685,029 2,671,800 2.0

Elyria Foundry Company, L.L.C. (d)

Metals Second Lien Term Loan 15.00% PIK, 8/10/2022 $ 790,957 790,957 790,957 0.6

Total Metals 10,475,986 3,462,757 2.6

Sub Total Non-control/Non-affiliated investments

295,295,973 289,721,139 217.1

Control investments - 32.4% (b)

Easy Ice, LLC (f)

Business Services Preferred Equity 10.00% PIK 5,080,000 8,124,444 10,212,022 7.6

Easy Ice, LLC (d), (f)

Business Services Second Lien Term Loan (L+11.00%), 5.44% Cash/7.56% PIK, 2/28/2023 $ 16,500,000 16,380,840 16,500,003 12.4

Total Business Services 24,505,284 26,712,025 20.0

Saratoga Investment Corp. CLO 2013-1, Ltd.
(a), (e), (f)
Structured Finance Securities Other/Structured Finance Securities 28.54%, 10/20/2025 $ 30,000,000 9,321,964 12,037,549 9.0
Saratoga Investment Corp. Class F
Note (a), (f)
Structured Finance Securities Other/Structured Finance Securities (L+8.50%), 9.82%, 10/20/2025 $ 4,500,000 4,500,000 4,499,100 3.4

Total Structured Finance Securities 13,821,964 16,536,649 12.4

Sub Total Control investments

38,327,248 43,248,674 32.4

TOTAL INVESTMENTS - 249.5% (b)

$   333,623,221 $ 332,969,813 249.5

Principal Cost Fair Value % of
Net Assets

Cash and cash equivalents and cash and cash equivalents, reserve accounts - 13.8% (b)

U.S. Bank Money Market (k)

$ 18,411,539 $ 18,411,539 $ 18,411,539 13.8

Total cash and cash equivalents and cash and cash equivalents, reserve accounts

$ 18,411,539 $ 18,411,539 $ 18,411,539 13.8

(a) Represents a non-qualifying investment as defined under Section 55 (a) of the Investment Company Act of 1940, as amended. Non-qualifying assets represent 5.0% of the Company's portfolio at fair value. As a BDC, the Company can only invest 30% of its portfolio in non-qualifying assets.
(b) Percentages are based on net assets of $133,459,608 as of August 31, 2017.
(c) Because there is no readily available market value for these investments, the fair values of these investments were determined using significant unobservable inputs and approved in good faith by our board of directors (see Note 3 to the consolidated financial statements).
(d) These securities are either fully or partially pledged as collateral under a senior secured revolving credit facility (see Note 6 to the consolidated financial statements).
(e) This investment does not have a stated interest rate that is payable thereon. As a result, the 28.54% interest rate in the table above represents the effective interest rate currently earned on the investment cost and is based on the current cash interest and other income generated by the investment.
(f) As defined in the Investment Company Act, we "Control" this portfolio company because we own more than 25% of the portfolio company's outstanding voting securities. Transactions during the six months ended August 31, 2017 in which the issuer was both an Affiliate and a portfolio company that we Control are as follows:

Company

Purchases Redemptions Sales Interest
Income
Management
and
Incentive
Fee Income
Net Realized
Gains
(Losses)
Net Change in
Unrealized
Appreciation
(Depreciation)

Easy Ice, LLC

$ -   $ -   $ (10,180,000 $ 2,040,242 $ -   $ 63,554 $ 1,990,902

Saratoga Investment Corp. CLO 2013-1, Ltd.

$ -   $ -   $ -   $ 1,048,973 $ 1,019,291 $ -   $ 2,084,710

Saratoga Investment Corp. Class F Note

$ -   $ -   $ -   $ 211,984 $ -   $ -   $ (450

(g) Non-income producing at August 31, 2017.
(h) Includes securities issued by an affiliate of the company.
(i) The investment has an unfunded commitment as of August 31, 2017 (see Note 7 to the consolidated financial statements).
(j) The entire commitment was unfunded at August 31, 2017. As such, no interest is being earned on this investment.
(k) Included within cash and cash equivalents and cash and cash equivalents, reserve accounts in the Company's consolidated statements of assets and liabilities as of August 31, 2017.

5

Table of Contents

Saratoga Investment Corp.

Consolidated Schedule of Investments

February 28, 2017

Company

Industry

Investment Interest Rate/

Maturity

Principal/
Number

of Shares
Cost Fair Value (c) % of
Net Assets

Non-control/Non-affiliated investments - 190.5% (b)

Apex Holdings Software Technologies, LLC

Business Services First Lien Term Loan (L+8.00%), 9.05% Cash, 9/21/2021 $ 18,000,000 $ 17,857,818 $ 17,843,400 14.0

Avionte Holdings, LLC (g)

Business Services Common Stock 100,000 100,000 251,000 0.2

BMC Software, Inc. (d)

Business Services Syndicated Loan (L+4.00%), 5.05% Cash, 9/10/2020 $ 5,611,666 5,582,551 5,639,163 4.4

Courion Corporation

Business Services Second Lien Term Loan (L+10.00%), 11.05% Cash, 6/1/2021 $ 15,000,000 14,879,353 14,230,500 11.2

Emily Street Enterprises, L.L.C.

Business Services Senior Secured Note (L+8.50%), 10.00% Cash, 1/23/2020 $ 3,300,000 3,282,213 3,316,500 2.6

Emily Street Enterprises, L.L.C. (g)

Business Services Warrant Membership Interests Expires 12/28/2022 49,318 400,000 394,544 0.3

Erwin, Inc.

Business Services Second Lien Term Loan (L+11.50%), 12.55% (11.50% Cash/1.00% PIK), 8/28/2021 $ 13,111,929 13,000,581 13,111,929 10.2

GreyHeller LLC

Business Services First Lien Term Loan (L+11.00%), 12.05% Cash, 11/16/2021 $ 7,000,000 6,933,141 6,930,000 5.4

GreyHeller LLC (i), (j)

Business Services Delayed Draw Term Loan B (L+11.00%), 12.05% Cash, 11/16/2021 $ -   -   -   0.0

GreyHeller LLC (g)

Business Services Common Stock 850,000 850,000 850,000 0.7

Help/Systems Holdings, Inc.(Help/Systems, LLC)

Business Services First Lien Term Loan (L+5.25%), 6.30% Cash, 10/8/2021 $ 5,947,481 5,857,960 5,947,481 4.7

Help/Systems Holdings, Inc.(Help/Systems, LLC)

Business Services Second Lien Term Loan (L+9.50%), 10.55% Cash, 10/8/2022 $ 3,000,000 2,922,606 2,926,800 2.3

Identity Automation Systems

Business Services Convertible Promissory Note 13.50% (6.75% Cash/6.75% PIK), 8/18/2018 611,517 611,517 611,517 0.5

Identity Automation Systems (g)

Business Services Common Stock Class A Units 232,616 232,616 386,143 0.3

Identity Automation Systems

Business Services First Lien Term Loan (L+9.25%), 10.30% (9.25% Cash/1.75% PIK) 12/18/2020 $ 10,293,791 10,223,741 10,293,791 8.1

Knowland Technology Holdings, L.L.C.

Business Services First Lien Term Loan (L+8.75%), 9.80% Cash, 7/20/2021 $ 17,777,730 17,692,307 17,777,730 14.0

Microsystems Company

Business Services Second Lien Term Loan (L+10.00%), 11.05% Cash, 7/1/2022 $ 8,000,000 7,927,489 7,964,800 6.3

National Waste Partners

Business Services Second Lien Term Loan 10.00% Cash, 2/13/2022 $ 9,000,000 8,910,000 8,910,000 7.0

Vector Controls Holding Co., LLC (d)

Business Services First Lien Term Loan, 14.00% (12.00% Cash/2.00% PIK), 3/6/2018 $ 8,819,270 8,778,186 8,819,270 6.9

Vector Controls Holding Co., LLC (d), (g)

Business Services Warrants to Purchase Limited Liability Company Interests, Expires 5/31/2025 343 -   327,200 0.3

Total Business Services 126,042,079 126,531,768 99.4

Targus Holdings, Inc. (d), (g)

Consumer Products Common Stock 210,456 1,791,242 29,241 0.0

Targus Holdings, Inc. (d)

Consumer Products Second Lien Term Loan A-2 15.00% PIK, 12/31/2019 $ 234,630 234,630 234,630 0.2

Targus Holdings, Inc. (d)

Consumer Products Second Lien Term Loan B 15.00% PIK, 12/31/2019 $ 703,889 703,889 703,889 0.6

Total Consumer Products 2,729,761 967,760 0.8

My Alarm Center, LLC

Consumer Services Second Lien Term Loan (L+11.00%), 12.05% Cash, 7/9/2019 $ 9,375,000 9,359,492 7,061,250 5.6

PrePaid Legal Services, Inc. (d)

Consumer Services First Lien Term Loan (L+5.25%), 6.50% Cash, 7/1/2019 $ 2,687,143 2,672,435 2,687,143 2.1

PrePaid Legal Services, Inc. (d)

Consumer Services Second Lien Term Loan (L+9.00%), 10.25% Cash, 7/1/2020 $ 11,000,000 10,966,188 11,000,000 8.6

Total Consumer Services 22,998,115 20,748,393 16.3

M/C Acquisition Corp., L.L.C. (d), (g)

Education Class A Common Stock 544,761 30,241 -   0.0

M/C Acquisition Corp., L.L.C. (d)

Education First Lien Term Loan 1.00% Cash, 3/31/2018 $ 2,321,073 1,193,790 8,087 0.0

Texas Teachers of Tomorrow, LLC (g), (h)

Education Common Stock 750 750,000 919,680 0.7

Texas Teachers of Tomorrow, LLC

Education Second Lien Term Loan (L+9.75%), 10.80% Cash, 6/2/2021 $ 10,000,000 9,918,572 10,000,000 7.9

Total Education 11,892,603 10,927,767 8.6

TM Restaurant Group L.L.C. (g)

Food and Beverage First Lien Term Loan (L+8.50%), 9.75% Cash, 7/17/2017 $ 9,358,694 9,331,446 8,422,825 6.6

Total Food and Beverage 9,331,446 8,422,825 6.6

Censis Technologies, Inc.

Healthcare Services First Lien Term Loan B (L+10.00%), 11.05% Cash, 7/24/2019 $ 11,100,000 10,977,689 10,940,160 8.6

Censis Technologies, Inc. (g), (h)

Healthcare Services Limited Partner Interests 999 999,000 886,772 0.7

ComForCare Health Care

Healthcare Services First Lien Term Loan (L+8.50%), 9.55% Cash, 1/31/2022 $ 10,500,000 10,398,957 10,395,000 8.2

Roscoe Medical, Inc. (d), (g)

Healthcare Services Common Stock 5,081 508,077 680,823 0.5

Roscoe Medical, Inc.

Healthcare Services Second Lien Term Loan 11.25% Cash, 9/26/2019 $ 4,200,000 4,155,827 4,179,000 3.3

Ohio Medical, LLC (g)

Healthcare Services Common Stock 5,000 500,000 288,800 0.2

Ohio Medical, LLC

Healthcare Services Senior Subordinated Note 12.00%, 7/15/2021 $ 7,300,000 7,238,831 6,989,750 5.5

Zest Holdings, LLC (d)

Healthcare Services Syndicated Loan (L+4.75%), 5.80% Cash, 8/17/2020 $ 4,136,911 4,085,888 4,183,658 3.3

Total Healthcare Services 38,864,269 38,543,963 30.3

HMN Holdco, LLC

Media First Lien Term Loan 12.00% Cash, 7/8/2021 $ 8,462,482 8,376,876 8,462,482 6.6

HMN Holdco, LLC

Media Delayed Draw First Lien Term Loan 12.00% Cash, 7/8/2021 $ 4,800,000 4,751,258 4,800,000 3.8

HMN Holdco, LLC (g)

Media Class A Series, Expires 1/16/2025 4,264 61,647 294,770 0.2

HMN Holdco, LLC (g)

Media Class A Warrant, Expires 1/16/2025 30,320 438,353 1,706,410 1.3

HMN Holdco, LLC (g)

Media Warrants to Purchase Limited Liability Company Interests (Common), Expires 5/16/2024 57,872 -   2,961,310 2.3

HMN Holdco, LLC (g)

Media Warrants to Purchase Limited Liability Company Interests (Preferred), Expires 5/16/2024 8,139 -   473,690 0.4

Total Media 13,628,134 18,698,662 14.6

Elyria Foundry Company, L.L.C. (d), (g)

Metals Common Stock 35,000 9,217,564 413,350 0.3

Elyria Foundry Company, L.L.C. (d)

Metals Second Lien Term Loan 15.00% PIK, 8/10/2022 $ 437,500 437,500 437,500 0.4

Total Metals 9,655,064 850,850 0.7

Mercury Network, LLC

Real Estate First Lien Term Loan (L+9.50%), 10.55% Cash, 8/24/2021 $ 15,773,875 15,644,382 15,773,875 12.4

Mercury Network, LLC (g)

Real Estate Common Stock 413,043 413,043 1,065,651 0.8

Total Real Estate 16,057,425 16,839,526 13.2

Sub Total Non-control/Non-affiliated investments

251,198,896 242,531,514 190.5

Control investments - 39.4% (b)

Easy Ice, LLC (g)

Business Services Preferred Equity 5,080,000 8,000,000 8,000,000 6.3

Easy Ice, LLC (d), (f)

Business Services First Lien Term Loan (L+10.25%), 11.02% Cash, 1/15/2020 $ 26,680,000 26,464,162 26,680,000 20.9

Total Business Services 34,464,162 34,680,000 27.2

Saratoga Investment Corp. CLO 2013-1, Ltd. (a), (d), (e), (f)

Structured Finance Securities Other/Structured Finance Securities 14.87%, 10/20/2025 $ 30,000,000 10,319,374 10,950,249 8.7

Saratoga Investment Corp. Class F Note (a), (d), (f)

Structured Finance Securities Other/Structured Finance Securities (L+8.50%), 9.55%, 10/20/2025 $ 4,500,000 4,500,000 4,499,550 3.5

Total Structured Finance Securities 14,819,374 15,449,799 12.2

Sub Total Control investments

49,283,536 50,129,799 39.4

TOTAL INVESTMENTS - 229.9% (b)

$ 300,482,432 $ 292,661,313 229.9

Principal Cost Fair Value % of
Net Assets

Cash and cash equivalents and cash and cash equivalents, reserve accounts - 17.4% (b)

U.S. Bank Money Market (k)

$ 22,087,968 $ 22,087,968 $ 22,087,968 17.4

Total cash and cash equivalents and cash and cash equivalents, reserve accounts

$ 22,087,968 $ 22,087,968 $ 22,087,968 17.4

(a) Represents a non-qualifying investment as defined under Section 55(a) of the Investment Company Act of 1940, as amended. Non-qualifying assets represent 5.3% of the Company's portfolio at fair value. As a BDC, the Company can only invest 30% of its portfolio in non-qualifying assets.
(b) Percentages are based on net assets of $127,294,777 as of February 28, 2017.
(c) Because there is no readily available market value for these investments, the fair values of these investments were determined using significant unobservable inputs and approved in good faith by our board of directors (see Note 3 to the consolidated financial statements).
(d) These securities are pledged as collateral under a senior secured revolving credit facility (see Note 6 to the consolidated financial statements).
(e) This investment does not have a stated interest rate that is payable thereon. As a result, the 14.87% interest rate in the table above represents the effective interest rate currently earned on the investment cost and is based on the current cash interest and other income generated by the investment.
(f) As defined in the Investment Company Act, we "Control" this portfolio company because we own more than 25% of the portfolio company's outstanding voting securities. Transactions during the year ended February 28, 2017 in which the issuer was both an Affiliate and a portfolio company that we Control are as follows:

Company

Purchases Redemptions Sales Interest
Income
Management
Fee Income
Net Realized
Gains
(Losses)
Net Unrealized
Appreciation
(Depreciation)

Easy Ice, LLC

$ 20,553,200 $ -   $ -   $ 217,362 $ -   $ -   $ 283,226

Saratoga Investment Corp. CLO 2013-1, Ltd.

$ -   $ -   $ -   $ 1,941,914 $ 1,499,001 $ -   $ 833,646

Saratoga Investment Corp. Class F Note

$ 4,500,000 $ -   $ -   $ 122,121 $ -   $ -   $ (450

(g) Non-income producing at February 28, 2017.
(h) Includes securities issued by an affiliate of the company.
(i) The investment has an unfunded commitment as of February 28, 2017 (see Note 7 to the consolidated financial statements).
(j) The entire commitment was unfunded at February 28, 2017. As such, no interest is being earned on this investment.
(k) Included within cash and cash equivalents and cash and cash equivalents, reserve accounts in the Company's consolidated statements of assets and liabilities as of February 28, 2017.

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Saratoga Investment Corp.

Consolidated Statements of Changes in Net Assets

(unaudited)

For the six months ended
August 31, 2017
For the six months ended
August 31, 2016

INCREASE FROM OPERATIONS:

Net investment income

$ 6,395,500 $ 5,142,330

Net realized gain (loss) from investments

(5,679,265 12,039,655

Net change in unrealized appreciation (depreciation) on investments

7,167,711 (8,622,780

Net increase in net assets from operations

7,883,946 8,559,205

DECREASE FROM SHAREHOLDER DISTRIBUTIONS:

Distributions declared

(5,457,810 (5,963,242

Net decrease in net assets from shareholder distributions

(5,457,810 (5,963,242

CAPITAL SHARE TRANSACTIONS:

Proceeds from issuance of common stock

2,639,413 -  

Stock dividend distribution

1,147,536 2,700,351

Repurchases of common stock

-   (1,882,567

Offering costs

(48,254 -  

Net increase in net assets from capital share transactions

3,738,695 817,784

Total increase in net assets

6,164,831 3,413,747

Net assets at beginning of period

127,294,777 125,149,875

Net assets at end of period

$ 133,459,608 $ 128,563,622

Net asset value per common share

$ 22.37 $ 22.39

Common shares outstanding at end of period

5,967,272 5,740,810

Distribution in excess of net investment income

$ (26,799,657 $ (27,038,814

See accompanying notes to consolidated financial statements.

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Saratoga Investment Corp.

Consolidated Statements of Cash Flows

(unaudited)

For the six months ended
August 31, 2017
For the six months ended
August 31, 2016

Operating activities

NET INCREASE IN NET ASSETS FROM OPERATIONS

$ 7,883,946 $ 8,559,205

ADJUSTMENTS TO RECONCILE NET INCREASE IN NET ASSETS FROM OPERATIONS TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:

Payment-in-kind interest income

(606,978 (276,597

Net accretion of discount on investments

(335,240 (254,323

Amortization of deferred debt financing costs

491,135 528,850

Net realized (gain) loss from investments

5,679,265 (12,039,655

Net change in unrealized (appreciation) depreciation on investments

(7,167,711 8,622,780

Proceeds from sales and repayments of investments

43,784,914 70,867,907

Purchase of investments

(81,662,750 (55,728,395

(Increase) decrease in operating assets:

Interest receivable

(479,210 (198,008

Management and incentive fee receivable

(84,028 (881

Other assets

(136,499 38,184

Receivable from unsettled trades

-   15,097

Increase (decrease) in operating liabilities:

Base management and incentive fees payable

(757,698 689,563

Accounts payable and accrued expenses

390,245 (224,033

Interest and debt fees payable

274,291 321,439

Payable for repurchases of common stock

-   (20,957

Directors fees payable

9,000 13,500

Due to manager

(44,119 115,759

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

(32,761,437 21,029,435

Financing activities

Borrowings on debt

46,500,000 -  

Paydowns on debt

(14,500,000 -  

Payments of deferred debt financing costs

(1,204,517 (313,400

Proceeds from issuance of common stock

2,639,413 -  

Payments of offering costs

(39,614 -  

Repurchases of common stock

-   (1,882,567

Payments of cash dividends

(4,310,274 (2,987,429

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

29,085,008 (5,183,396

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS

(3,676,429 15,846,039

CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, BEGINNING OF PERIOD

22,087,968 7,034,783

CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, END OF PERIOD

$ 18,411,539 $ 22,880,822

Supplemental information:

Interest paid during the period

$ 4,721,025 $ 3,887,472

Cash paid for taxes

$ 69,345 $ 140,029

Supplemental non-cash information:

Payment-in-kind interest income

$ 606,978 $ 276,597

Net accretion of discount on investments

$ 335,240 $ 254,323

Amortization of deferred debt financing costs

$ 491,135 $ 528,850

Stock dividend distribution

$ 1,147,536 $ 2,700,351

See accompanying notes to consolidated financial statements.

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SARATOGA INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2017

(unaudited)

Note 1. Organization

Saratoga Investment Corp. (the "Company", "we", "our" and "us") is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company ("BDC") under the Investment Company Act of 1940 (the "1940 Act"). The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering ("IPO") on March 28, 2007. The Company has elected to be treated as a regulated investment company ("RIC") under subchapter M of the Internal Revenue Code (the "Code"). The Company expects to continue to qualify and to elect to be treated, for tax purposes, as a RIC. The Company's investment objective is to generate current income and, to a lesser extent, capital appreciation from its investments.

GSC Investment, LLC (the "LLC") was organized in May 2006 as a Maryland limited liability company. As of February 28, 2007, the LLC had not yet commenced its operations and investment activities.

On March 21, 2007, the Company was incorporated and concurrently therewith the LLC was merged with and into the Company, with the Company as the surviving entity, in accordance with the procedure for such merger in the LLC's limited liability company agreement and Maryland law. In connection with such merger, each outstanding limited liability company interest of the LLC was converted into a share of common stock of the Company.

On July 30, 2010, the Company changed its name from "GSC Investment Corp." to "Saratoga Investment Corp." in connection with the consummation of a recapitalization transaction.

The Company is externally managed and advised by the investment adviser, Saratoga Investment Advisors, LLC (the "Manager"), pursuant to a management agreement (the "Management Agreement"). Prior to July 30, 2010, the Company was managed and advised by GSCP (NJ), L.P.

The Company has established wholly-owned subsidiaries, SIA Avionte, Inc., SIA Easy Ice, LLC, SIA GH, Inc., SIA MAC, Inc., SIA Mercury, Inc., SIA TT, Inc., and SIA Vector, Inc., which are structured as Delaware entities, or tax blockers, to hold equity or equity-like investments in portfolio companies organized as limited liability companies, or LLCs (or other forms of pass through entities). Tax blockers are consolidated for accounting purposes, but are not consolidated for income tax purposes and may incur income tax expense as a result of their ownership of portfolio companies.

On March 28, 2012, our wholly-owned subsidiary, Saratoga Investment Corp. SBIC, LP ("SBIC LP"), received a Small Business Investment Company ("SBIC") license from the Small Business Administration ("SBA").

On April 2, 2015, the SBA issued a "green light" letter inviting the Company to continue the application process to obtain a license to form and operate its second SBIC subsidiary. On September 27, 2016, the SBA informed us that as part of their continued review of our application for a second license, and in order to ensure that they were reviewing the most current information available, we would need to update all previously submitted materials and invited us to reapply. As a result of this request, with which we are in the process of complying, the existing "green light" letter that the SBA issued to us has expired. If approved in the future, a second SBIC license would provide us an incremental source of long-term capital by permitting us to issue up to $150.0 million of additional SBA-guaranteed debentures in addition to the $150.0 million already approved under the first license.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with generally accepted accounting principles ("U.S. GAAP"), are stated in U.S. Dollars and include the accounts of the Company and its special purpose financing subsidiary, Saratoga Investment Funding, LLC (previously known as GSC Investment Funding LLC), SBIC LP, SIA Avionte, Inc., SIA Easy Ice, LLC, SIA GH, Inc., SIA MAC, Inc., SIA Mercury, Inc., SIA TT, Inc., and SIA Vector, Inc. All intercompany accounts and transactions have been eliminated in consolidation. All references made to the "Company," "we," and "us" herein include Saratoga Investment Corp. and its consolidated subsidiaries, except as stated otherwise.

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The Company and SBIC LP are both considered to be investment companies for financial reporting purposes and have applied the guidance in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 946, Financial Services - Investment Companies ("ASC 946"). There have been no changes to the Company or SBIC LP's status as investment companies during the six months ended August 31, 2017.

Use of Estimates in the Preparation of Financial Statements

The preparation of the accompanying consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and income, gains (losses) and expenses during the period reported. Actual results could differ materially from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include short-term, liquid investments in a money market fund. Cash and cash equivalents are carried at cost which approximates fair value. Per section 12(d)(1)(A) of the 1940 Act, the Company may not invest in another registered investment company such as, a money market fund if such investment would cause the Company to exceed any of the following limitations:

we were to own more than 3.0% of the total outstanding voting stock of the money market fund;

we were to hold securities in the money market fund having an aggregate value in excess of 5.0% of the value of our total assets, except as allowed pursuant to Rule 12d1-1 of Section 12(d)(1) of the 1940 Act which is designed to permit "cash sweep" arrangements rather than investments directly in short-term instruments; or

we were to hold securities in money market funds and other registered investment companies and BDCs having an aggregate value in excess of 10.0% of the value of our total assets.

As of August 31, 2017, the Company did not exceed any of these limitations.

Cash and Cash Equivalents, Reserve Accounts

Cash and cash equivalents, reserve accounts include amounts held in designated bank accounts in the form of cash and short-term liquid investments in money market funds, representing payments received on secured investments or other reserved amounts associated with the Company's $45.0 million senior secured revolving credit facility with Madison Capital Funding LLC. The Company is required to use these amounts to pay interest expense, reduce borrowings, or pay other amounts in accordance with the terms of the senior secured revolving credit facility.

In addition, cash and cash equivalents, reserve accounts also include amounts held in designated bank accounts, in the form of cash and short-term liquid investments in money market funds, within our wholly-owned subsidiary, SBIC LP.

In November 2016, the FASB issued Accounting Standards Update ("ASU") 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18"). ASU 2016-18 requires that the statements of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and early adoption is permitted and is to be applied on a retrospective basis. The Company has adopted the provisions of ASU 2016-18 as of November 30, 2016. The adoption of the provisions of ASU 2016-18 did not materially impact the Company's consolidated financial position or results of operations. Prior period amounts were reclassified to conform to the current period presentation.

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The following table provides a reconciliation of cash and cash equivalents and cash and cash equivalents, reserve accounts reported within the consolidated statements of assets and liabilities that sum to the total of the same such amounts shown in the consolidated statements of cash flows:

August 31,
2017
August 31,
2016

Cash and cash equivalents

$ 1,595,438 $ 12,707,273

Cash and cash equivalents, reserve accounts

16,816,101 10,173,549

Total cash and cash equivalents, and cash and cash equivalents, reserve accounts

$ 18,411,539 $ 22,880,822

Investment Classification

The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, "Control Investments" are defined as investments in companies in which we own more than 25.0% of the voting securities or maintain greater than 50.0% of the board representation. Under the 1940 Act, "Affiliated Investments" are defined as those non-control investments in companies in which we own between 5.0% and 25.0% of the voting securities. Under the 1940 Act, "Non-affiliated Investments" are defined as investments that are neither Control Investments nor Affiliated Investments.

Investment Valuation

The Company accounts for its investments at fair value in accordance with the FASB ASC Topic 820, Fair Value Measurements and Disclosures ("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. ASC 820 requires the Company to assume that its investments are to be sold 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 our Manager, the audit committee of our board of directors and a third party independent valuation firm. Determinations of fair value may involve subjective judgments and estimates. The types of factors that may be considered in determining the fair value of our investments include the nature and realizable value of any collateral, the portfolio company's ability to make payments, market yield trend analysis, the markets in which the portfolio company does business, comparison to publicly traded companies, discounted cash flow and other relevant factors.

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

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

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.

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

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

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

The Company's investment in Saratoga Investment Corp. CLO 2013-1, Ltd. ("Saratoga CLO") is carried at fair value, which is based on a discounted cash flow model 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 comparable yields for equity interests in collateralized loan obligation funds similar to Saratoga CLO, when available, as determined by our Manager and

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recommended to our board of directors. Specifically, we use Intex cash flow models, or an appropriate substitute, to form the basis for the valuation of our investment in Saratoga CLO. The models use a set of assumptions including projected default rates, recovery rates, reinvestment rates and prepayment rates in order to arrive at estimated valuations. The assumptions are based on available market data and projections provided by third parties as well as management estimates. The Company uses 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.

Because such valuations, and particularly valuations of private investments and private companies, are inherently uncertain, they may fluctuate over short periods of time and may be based on estimates. The determination of fair value may differ materially from the values that would have been used if a ready market for these investments existed. The Company's net asset value could be materially affected if the determinations regarding the fair value of our investments were materially higher or lower than the values that we ultimately realize upon the disposal of such investments.

Derivative Financial Instruments

The Company accounts for derivative financial instruments in accordance with ASC Topic 815, Derivatives and Hedging ("ASC 815"). ASC 815 requires recognizing all derivative instruments as either assets or liabilities on the consolidated statements of assets and liabilities at fair value. The Company values derivative contracts at the closing fair value provided by the counterparty. Changes in the values of derivative contracts are included in the consolidated statements of operations.

Investment Transactions and 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. The Company stops accruing interest on its 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.

Interest income on our investment in Saratoga CLO is recorded using the effective interest method in accordance with the provisions of ASC Topic 325-40, Investments-Other, Beneficial Interests in Securitized Financial Assets , ("ASC 325-40"), 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.

Other Income

Other income includes dividends received, origination fees, structuring fees and advisory fees, and is recorded in the consolidated statements of operations when earned.

Payment-in-Kind Interest

The Company holds debt investments in its 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 the 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. At August 31, 2017, certain investments in two portfolio companies were on non-accrual status with a combined fair value of approximately $8.4 million, or 2.5% of the fair value of our portfolio.

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Deferred Debt Financing Costs

Financing costs incurred in connection with our credit facility and notes are deferred and amortized using the straight line method over the life of the respective facility and debt securities. Financing costs incurred in connection with our SBA debentures are deferred and amortized using the effective yield method over the life of the debentures.

ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03") requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The Company has adopted the provisions of ASU 2015-03 as of February 28, 2015, by reclassifying deferred debt financing costs from within total assets to within total liabilities as a contra-liability. Prior period amounts were reclassified to conform to the current period presentation.

Contingencies

In the ordinary course of business, the Company may enter into contracts or agreements that contain indemnifications or warranties. Future events could occur that lead to the execution of these provisions against the Company. Based on its history and experience, management feels that the likelihood of such an event is remote. Therefore, the Company has not accrued any liabilities in connection with such indemnifications.

In the ordinary course of business, the Company may directly or indirectly be a defendant or plaintiff in legal actions with respect to bankruptcy, insolvency or other types of proceedings. Such lawsuits may involve claims that could adversely affect the value of certain financial instruments owned by the Company.

Income Taxes

The Company elected to be treated for tax purposes as a RIC under the Code and, among other things, intends to make the requisite distributions to its stockholders which will relieve the Company from federal income taxes. Therefore, no provision has been recorded for federal income taxes.

In order to qualify as a RIC, among other requirements, the Company is required to timely distribute to its stockholders at least 90.0% of its investment company taxable income, as defined by the Code, for each fiscal tax year. The Company will be subject to a nondeductible U.S. federal excise tax of 4.0% on undistributed income if it does not distribute at least 98.0% of its ordinary income in any calendar year and 98.2% of its capital gain net income for each one-year period ending on October 31.

Depending on the level of taxable income earned in a tax year, the Company may choose to carry forward taxable income in excess of current year dividend distributions into the next tax year and pay a 4.0% excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year dividend distributions for excise tax purposes, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned.

In accordance with certain applicable U.S. Treasury regulations and private letter rulings 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 on the aggregate amount of cash to be distributed to all stockholders, which limitation must be at least 20.0% of the aggregate declared distribution. If too many stockholders elect to receive cash, each stockholder electing to receive cash will receive a pro rata amount of cash (with the balance of the distribution paid in stock). In no event will any stockholder, electing to receive cash, receive less than 20.0% of his or her entire distribution in cash. If these and certain other requirements are met, for U.S federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock.

ASC 740, Income Taxes , ("ASC 740"), provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions deemed to meet a "more-likely-than-not" threshold would be recorded as a tax benefit or expense in the current period. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense on the consolidated statements of operations. During the fiscal year ended February 28, 2017, the Company did not incur any interest or penalties. Although we file federal and state tax returns, our major tax jurisdiction is federal. The 2014, 2015 and 2016 federal tax years for the Company remain subject to examination by the IRS. As of August 31, 2017 and February 28, 2017, there were no uncertain tax positions. The Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change significantly in the next 12 months.

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Dividends

Dividends to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend is determined by the board of directors. Net realized capital gains, if any, are generally distributed at least annually, although we may decide to retain such capital gains for reinvestment.

We have adopted a dividend reinvestment plan ("DRIP") that provides for reinvestment of our dividend distributions on behalf of our stockholders unless a stockholder elects to receive cash. As a result, if our board of directors authorizes, and we declare, a cash dividend, then our stockholders who have not "opted out" of the DRIP by the dividend record date will have their cash dividends automatically reinvested into additional shares of our common stock, rather than receiving the cash dividends. We have the option to satisfy the share requirements of the DRIP through the issuance of new shares of common stock or through open market purchases of common stock by the DRIP plan administrator.

Capital Gains Incentive Fee

The Company records an expense accrual on the consolidated statements of operations, relating to the capital gains incentive fee payable on the consolidated statements of assets and liabilities, by the Company to its investment adviser when the net realized and unrealized gain on its investments exceed all net realized and unrealized capital losses on its investments given the fact that a capital gains incentive fee would be owed to the investment adviser if the Company were to liquidate its investment portfolio at such time. The actual incentive fee payable to the Company's investment adviser 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 net of realized and unrealized losses for the period.

New Accounting Pronouncements

In March 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20) , Premium Amortization on Purchased Callable Debt Securities ("ASU 2017-08") which amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. ASU 2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be amortized to maturity. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management is currently evaluating the impact these changes will have on the Company's consolidated financial statements and disclosures.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) , Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"), which is intended to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2017, and interim periods therein. Early adoption is permitted. Management is currently evaluating the impact ASU 2016-15 will have on the Company's consolidated financial statements and disclosures.

In February 2016, the FASB issued ASU 2016-02, Amendments to the Leases ("ASU Topic 842"), which will require for all operating leases the recognition of a right-of-use asset and a lease liability, in the statement of financial position. The lease cost will be allocated over the lease term on a straight-line basis. This guidance is effective for annual and interim periods beginning after December 15, 2018. Management is currently evaluating the impact these changes will have on the Company's consolidated financial statements and disclosures.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"). ASU 2016-01 retains many current requirements for the classification and measurement of financial instruments; however, it significantly revises an entity's accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. ASU 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments. This guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is not permitted for public business entities. Management is currently evaluating the impact the adoption of this standard has on the Company's consolidated financial statements and disclosures.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Revenue Recognition (Topic 605). Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In May 2016, ASU 2016-12 amended ASU 2014-09 and deferred the effective period to December 15, 2017. Management has concluded that the majority of its revenues associated with financial instruments are scoped out of ASC 606. Management is evaluating the impact of the standard on certain other income earned by the Company.

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Risk Management

In the ordinary course of its business, the Company manages a variety of risks, including market risk and credit risk. Market risk is the risk of potential adverse changes to the value of investments because of changes in market conditions such as interest rate movements and volatility in investment prices.

Credit risk is the risk of default or non-performance by portfolio companies, equivalent to the investment's carrying amount.

The Company is also exposed to credit risk related to maintaining all of its cash and cash equivalents, including those in reserve accounts, at a major financial institution and credit risk related to any of its derivative counterparties.

The Company has investments in lower rated and comparable quality unrated high yield bonds and bank loans. Investments in high yield investments are accompanied by a greater degree of credit risk. The risk of loss due to default by the issuer is significantly greater for holders of high yield securities, because such investments are generally unsecured and are often subordinated to other creditors of the issuer.

Note 3. Investments

As noted above, the Company values all investments in accordance with ASC 820. ASC 820 requires enhanced disclosures about assets and liabilities that are measured and reported at fair value. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820 establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability of inputs used in measuring investments at fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Based on the observability of the inputs used in the valuation techniques, the Company is required to provide disclosures on fair value measurements according to the fair value hierarchy. The fair value hierarchy ranks the observability of the inputs used to determine fair values. Investments carried at fair value are classified and disclosed in one of the following three categories:

Level 1-Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2-Valuations based on inputs other than quoted prices in active markets, which are either directly or indirectly observable.

Level 3-Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The inputs used in the determination of fair value may require significant management judgment or estimation. Such information may be the result of consensus pricing information or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by a disclaimer would result in classification as a Level 3 asset, assuming no additional corroborating evidence.

In addition to using the above inputs in investment valuations, the Company continues to employ the valuation policy approved by the board of directors that is consistent with ASC 820 and the 1940 Act (see Note 2). Consistent with our valuation policy, we evaluate the source of inputs, including any markets in which our investments are trading, in determining fair value.

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The following table presents fair value measurements of investments, by major class, as of August 31, 2017 (dollars in thousands), according to the fair value hierarchy:

Level 1 Level 2 Level 3 Total

Syndicated loans

$ -   $ -   $ 8,980 $ 8,980

First lien term loans

-   -   182,781 182,781

Second lien term loans

-   -   97,462 97,462

Structured finance securities

-   -   16,537 16,537

Equity interests

-   -   27,210 27,210

Total

$ -   $ -   $ 332,970 $ 332,970

The following table presents fair value measurements of investments, by major class, as of February 28, 2017 (dollars in thousands), according to the fair value hierarchy:

Level 1 Level 2 Level 3 Total

Syndicated loans

$ -   $ -   $ 9,823 $ 9,823

First lien term loans

-   -   159,097 159,097

Second lien term loans

-   -   87,750 87,750

Structured finance securities

-   -   15,450 15,450

Equity interests

-   -   20,541 20,541

Total

$ -   $ -   $ 292,661 $ 292,661

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the six months ended August 31, 2017 (dollars in thousands):

Syndicated
loans
First lien
term loans
Second
lien
term loans
Structured
finance
securities
Equity
interests
Total

Balance as of February 28, 2017

$ 9,823 $ 159,097 $ 87,750 $ 15,450 $ 20,541 $ 292,661

Net unrealized appreciation (depreciation) on investments

(48 255 1,799 2,084 3,078 7,168

Purchases and other adjustments to cost

10 78,571 1,560 -   2,464 82,605

Sales and repayments

(751 (12,680 (25,954 (997 (3,403 (43,785

Net realized gain (loss) from investments

(54 (8 (7,530 -   1,913 (5,679

Restructures in

-   -   39,837 -   2,617 42,454

Restructures out

-   (42,454 -   -   -   (42,454

Balance as of August 31, 2017

$ 8,980 $ 182,781 $ 97,462 $ 16,537 $ 27,210 $ 332,970

Net change in unrealized appreciation (depreciation) for the period relating to those Level 3 assets that were still held by the Company at the end of the period:

$ (48 $ 255 $ 1,928 $ 2,084 $ 3,731 $ 7,950

Purchases and other adjustments to cost include purchases of new investments at cost, effects of refinancing/restructuring, accretion/amortization of income from discount/premium on debt securities, and PIK.

Sales and repayments represent net proceeds received from investments sold, and principal paydowns received, during the period.

Transfers and restructurings, if any, are recognized at the beginning of the period in which they occur.

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The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the six months ended August 31, 2016 (dollars in thousands):

Syndicated
loans
First lien
term loans
Second
lien
term loans
Structured
finance
securities
Equity
interests
Total

Balance as of February 29, 2016

$ 11,868 $ 144,643 $ 88,178 $ 12,828 $ 26,479 $ 283,996

Net unrealized appreciation (depreciation) on investments

2,100 217 1,076 1,171 (13,187 (8,623

Purchases and other adjustments to cost

51 44,689 10,899 -   620 56,259

Sales and redemptions

(4,556 (36,518 (13,269 (2,082 (14,443 (70,868

Net realized gain from investments

53 245 140 -   11,602 12,040

Balance as of August 31, 2016

$ 9,516 $ 153,276 $ 87,024 $ 11,917 $ 11,071 $ 272,804

Net change in unrealized appreciation (depreciation) for the period relating to those Level 3 assets that were still held by the Company at the end of the period:

$ 955 $ 594 $ 1,135 $ 1,171 $ (2,083 $ 1,772

Purchases and other adjustments to cost include purchases of new investments at cost, effects of refinancing/restructuring, accretion/amortization of income from discount/premium on debt securities, and PIK.

Sales and repayments represent net proceeds received from investments sold, and principal paydowns received, during the period.

Transfers and restructurings, if any, are recognized at the beginning of the period in which they occur.

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets as of August 31, 2017 were as follows (dollars in thousands):

Fair Value Valuation Technique Unobservable Input Range

Syndicated loans

$ 8,980 Market Comparables Third-Party Bid (%) 99.1%  - 100.6%

First lien term loans

182,781 Market Comparables Market Yield (%) 5.8%  - 14.0%
EBITDA Multiples (x) 3.0x  - 5.5x
Third-Party Bid (%) 100.3%  - 100.5%

Second lien term loans

97,462 Market Comparables Market Yield (%) 9.2%  - 16.0%
Third-Party Bid (%) 97.9%  - 100.4%

Structured finance securities

16,537 Discounted Cash Flow Discount Rate (%) 8.5%  - 14.0%

Equity interests

27,210 Market Comparables EBITDA Multiples (x) 3.7x  - 14.0x

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets as of February 28, 2017 were as follows (dollars in thousands):

Fair Value Valuation Technique Unobservable Input Range

Syndicated loans

$ 9,823 Market Comparables Third-Party Bid (%) 100.5%  - 101.1%

First lien term loans

159,097 Market Comparables Market Yield (%) 6.3%  - 39.0%
EBITDA Multiples (x) 3.0x  - 10.3x
Third-Party Bid (%) 100.0%  - 100.2%

Second lien term loans

87,750 Market Comparables Market Yield (%) 10.1%  - 26.4%
Third-Party Bid (%) 97.6%  - 99.9%

Structured finance securities

15,450 Discounted Cash Flow Discount Rate (%) 8.5%  - 13.0%

Equity interests

20,541 Market Comparables EBITDA Multiples (x) 3.7x  - 12.0x

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For investments utilizing a market comparables valuation technique, a significant increase (decrease) in the market yield, in isolation, would result in a significantly lower (higher) fair value measurement, and a significant increase (decrease) in any of the EBITDA or revenue valuation multiples, in isolation, would result in a significantly higher (lower) fair value measurement. For investments utilizing a discounted cash flow valuation technique, a significant increase (decrease) in the discount rate, in isolation, would result in a significantly lower (higher) fair value measurement. For investments utilizing a market quote in deriving a value, a significant increase (decrease) in the market quote, in isolation, would result in a significantly higher (lower) fair value measurement.

The composition of our investments as of August 31, 2017, at amortized cost and fair value was as follows (dollars in thousands):

Investments at
Amortized Cost
Amortized Cost
Percentage of

Total Portfolio
Investments at
Fair Value
Fair Value
Percentage of
Total Portfolio

Syndicated loans

$ 8,874 2.7 $ 8,980 2.7

First lien term loans

184,210 55.2 182,781 54.9

Second lien term loans

98,223 29.4 97,462 29.2

Structured finance securities

13,822 4.1 16,537 5.0

Equity interests

28,494 8.6 27,210 8.2

Total

$ 333,623 100.0 $ 332,970 100.0

The composition of our investments as of February 28, 2017, at amortized cost and fair value was as follows (dollars in thousands):

Investments at
Amortized Cost
Amortized Cost
Percentage of
Total Portfolio
Investments at
Fair Value
Fair Value
Percentage of
Total Portfolio

Syndicated loans

$ 9,669 3.2 $ 9,823 3.4

First lien term loans

160,436 53.4 159,097 54.3

Second lien term loans

90,655 30.2 87,750 30.0

Structured finance securities

14,819 4.9 15,450 5.3

Equity interests

24,903 8.3 20,541 7.0

Total

$ 300,482 100.0 $ 292,661 100.0

For loans and debt securities for which market quotations are not available, we determine their fair value based on third party indicative broker quotes, where available, or the assumptions that a hypothetical market participant would use to value the security in a current hypothetical sale using a market yield valuation methodology. In applying the market yield valuation methodology, we determine the fair value based on such factors as market participant assumptions including synthetic credit ratings, estimated remaining life, current market yield and interest rate spreads of similar securities as of the measurement date. If, in our judgment, the market yield methodology is not sufficient or appropriate, we may use additional methodologies such as an asset liquidation or expected recovery model.

For equity securities of portfolio companies and partnership interests, we determine the fair value based on the market approach with value then attributed to equity or equity like securities using the enterprise value waterfall valuation methodology. Under the enterprise value waterfall valuation methodology, we determine the enterprise fair value of the portfolio company and then waterfall the enterprise value over the portfolio company's securities in order of their preference relative to one another. To estimate the enterprise value of the portfolio company, we weigh some or all of the traditional market valuation methods and factors based on the individual circumstances of the portfolio company in order to estimate the enterprise value. The methodologies for performing investments may be based on, among other things: valuations of comparable public companies, recent sales of private and public comparable companies, discounting the forecasted cash flows of the portfolio company, third party valuations of the portfolio company, considering offers from third parties to buy the company, estimating the value to potential strategic buyers and considering the value of recent investments in the equity securities of the portfolio company. For non-performing investments, we may estimate the liquidation or collateral value of the portfolio company's assets and liabilities. We also take into account historical and anticipated financial results.

Our investment in Saratoga CLO is carried at fair value, which is based on a discounted cash flow model 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 comparable yields for equity interests in collateralized loan obligation funds similar to Saratoga CLO, when available, as determined by our Manager and recommended to our board of directors. Specifically, we use Intex cash flow models, or an appropriate substitute, to form the basis for the valuation of our investment in Saratoga CLO. The models use a set of assumptions including projected default rates, recovery rates, reinvestment rate and prepayment rates in order to arrive at

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estimated valuations. The assumptions are based on available market data and projections provided by third parties as well as management estimates. In connection with the refinancing of the Saratoga CLO liabilities, we ran Intex models based on assumptions about the refinanced Saratoga CLO's structure, including capital structure, cost of liabilities and reinvestment period. 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 at August 31, 2017. The significant inputs at August 31, 2017 for the valuation model include:

Default rates: 2.0%

Recovery rates: 35-70%

Discount rate: 14.0%

Prepayment rate: 20.0%

Reinvestment rate / price: L+350bps / $99.75.

Note 4. Investment in Saratoga Investment Corp. CLO 2013-1, Ltd. ("Saratoga CLO")

On January 22, 2008, the Company invested $30.0 million in all of the outstanding subordinated notes of GSC Investment Corp. CLO 2007, Ltd., a collateralized loan obligation fund managed by the Company that invests primarily in senior secured loans. Additionally, the Company entered into a collateral management agreement with GSC Investment Corp. CLO 2007, Ltd. pursuant to which we act as collateral manager to it. The Saratoga CLO was initially refinanced in October 2013 and its reinvestment period ended in October 2016. On November 15, 2016, the Company completed the second refinancing of the Saratoga CLO. The Saratoga CLO refinancing, among other things, extended its reinvestment period to October 2018, and extended its legal maturity date to October 2025. Following the refinancing, the Saratoga CLO portfolio remained at the same size and with a similar capital structure of approximately $300.0 million in aggregate principal amount of predominantly senior secured first lien term loans. In addition to refinancing its liabilities, we also purchased $4.5 million in aggregate principal amount of the Class F notes tranche of the Saratoga CLO at par, with a coupon of LIBOR plus 8.5%.

The Saratoga CLO remains 100.0% owned and managed by Saratoga Investment Corp. Following the refinancing, the Company receives a base management fee of 0.10% and a subordinated management fee of 0.40% of the fee basis amount at the beginning of the collection period, paid quarterly to the extent of available proceeds. The Company is also 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%. For the three months ended August 31, 2017 and August 31, 2016, we accrued $0.4 million and $0.4 million in management fee income, respectively, and $0.6 million and $0.6 million in interest income, respectively, from Saratoga CLO. For the six months ended August 31, 2017 and August 31, 2016, we accrued $0.8 million and $0.7 million in management fee income, respectively, and $1.0 million and $1.1 million in interest income, respectively, from Saratoga CLO. For the three and six months ended August 31, 2017, we accrued $0.2 million and $0.3 million, respectively, related to the incentive management fee from Saratoga CLO. For the three and six months ended August 31, 2016, we did not accrue any amounts related to the incentive management fee from Saratoga CLO as the 12.0% hurdle rate had not yet been achieved.

As of August 31, 2017, the Company determined that the fair value of its investment in the subordinated notes of Saratoga CLO was $12.0 million. The Company determines the fair value of its investment in the subordinated notes of Saratoga CLO based on the present value of the projected future cash flows of the subordinated notes over the life of Saratoga CLO. As of August 31, 2017, Saratoga CLO had investments with a principal balance of $300.1 million and a weighted average spread over LIBOR of 4.0%, and had debt with a principal balance of $282.4 million with a weighted average spread over LIBOR of 2.4%. As a result, Saratoga CLO earns a "spread" between the interest income it receives on its investments and the interest expense it pays on its debt and other operating expenses, which is distributed quarterly to the Company as the holder of its subordinated notes. At August 31, 2017, the present value of the projected future cash flows of the subordinated notes was approximately $12.3 million, using a 14.0% discount rate. Saratoga Investment Corp. invested $32.8 million into the CLO since January 2008, and to date has since received distributions of $51.4 million, management fees of $17.2 million, and incentive fees of $0.2 million.

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Below is certain financial information from the separate financial statements of Saratoga CLO as of August 31, 2017 (unaudited) and February 28, 2017 and for the three and six months ended August 31, 2017 (unaudited) and August 31, 2016 (unaudited).

Saratoga Investment Corp. CLO 2013-1, Ltd.

Statements of Assets and Liabilities

As of
August 31, 2017 February 28, 2017
(unaudited)

ASSETS

Investments

Fair Value Loans (amortized cost of $297,693,136 and $294,270,284, respectively)

$ 294,524,360 $ 292,437,930

Fair Value Other/Structured finance securities (cost of $3,531,218 and $3,531,218, respectively)

292 22,718

Total investments at fair value (amortized cost of $301,224,354 and $297,801,502 respectively)

294,524,652 292,460,648

Cash and cash equivalents

7,475,599 13,046,555

Receivable from open trades

11,671,407 1,505,000

Interest receivable

1,287,219 1,443,865

Other assets

-   6,049

Total assets

$ 314,958,877 $ 308,462,117

LIABILITIES

Interest payable

$ 1,155,865 $ 1,031,457

Payable from open trades

16,017,662 9,431,552

Accrued base management fee

34,273 34,221

Accrued subordinated management fee

137,092 136,885

Accrued incentive fee

83,769 -  

Class A-1 Notes - SIC CLO 2013-1, Ltd.

170,000,000 170,000,000

Class A-2 Notes - SIC CLO 2013-1, Ltd.

20,000,000 20,000,000

Class B Notes - SIC CLO 2013-1, Ltd.

44,800,000 44,800,000

Class C Notes - SIC CLO 2013-1, Ltd.

16,000,000 16,000,000

Discount on Class C Notes - SIC CLO 2013-1, Ltd.

(72,840 (77,383

Class D Notes - SIC CLO 2013-1, Ltd.

14,000,000 14,000,000

Discount on Class D Notes - SIC CLO 2013-1, Ltd.

(338,157 (359,249

Class E Notes - SIC CLO 2013-1, Ltd.

13,100,000 13,100,000

Class F Notes - SIC CLO 2013-1, Ltd.

4,500,000 4,500,000

Deferred debt financing costs, SIC CLO 2013-1, Ltd. Notes

(1,077,170 (1,161,590

Subordinated Notes

30,000,000 30,000,000

Total liabilities

$ 328,340,494 $ 321,435,893

Commitments and contingencies

NET ASSETS

Ordinary equity, par value $1.00, 250 ordinary shares authorized, 250 and 250 issued and outstanding, respectively

$ 250 $ 250

Accumulated loss

(12,974,026 (21,557,618

Net gain (loss)

(407,841 8,583,592

Total net assets

(13,381,617 (12,973,776

Total liabilities and net assets

$   314,958,877 $   308,462,117

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Saratoga Investment Corp. CLO 2013-1, Ltd.

Statements of Operations

(unaudited)

For the three months ended
August 31
For the six months ended
August 31
2017 2016 2017 2016

INVESTMENT INCOME

Interest from investments

$ 4,150,598 $ 4,028,665 $ 8,128,469 $ 7,817,001

Interest from cash and cash equivalents

4,343 1,938 9,426 2,709

Other income

84,556 189,836 245,170 433,137

Total investment income

4,239,497 4,220,439 8,383,065 8,252,847

EXPENSES

Interest expense

3,312,058 3,608,788 6,935,616 6,889,803

Professional fees

18,556 20,944 53,107 39,426

Miscellaneous fee expense

19,833 14,147 29,959 22,391

Base management fee

75,192 187,329 150,328 374,171

Subordinated management fee

300,765 187,329 601,310 374,171

Incentive fees

162,358 -   267,653 -  

Trustee expenses

38,547 37,839 74,715 64,527

Amortization expense

44,357 239,963 88,714 479,926

Total expenses

3,971,666 4,296,339 8,201,402 8,244,415

NET INVESTMENT INCOME (LOSS)

267,831 (75,900 181,663 8,432

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

Net realized gain on investments

475,486 165,854 769,344 221,416

Net unrealized appreciation (depreciation) on investments

(1,311,081 467,724 (1,358,848 9,788,397

Net gain (loss) on investments

(835,595 633,578 (589,504 10,009,813

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

$ (567,764 $ 557,678 $ (407,841 $ 10,018,245

21

Table of Contents

Saratoga Investment Corp. CLO 2013-1 Ltd.

Schedule of Investments

August 31, 2017

(unaudited)

Issuer Name

Industry

Asset Name

Asset
Type
Spread LIBOR
Floor
PIK Current
Rate
(All In)
Maturity
Date
Principal/
Number of
Shares
Cost Fair Value

Education Management II, LLC

Leisure Goods/Activities/Movies A-1 Preferred Shares Equity 0.00 0.00 0.00 0.00 6,692 $ 669,214 $ 134

Education Management II, LLC

Leisure Goods/Activities/Movies A-2 Preferred Shares Equity 0.00 0.00 0.00 0.00 18,975 1,897,538 1

New Millennium Holdco, Inc.

Healthcare & Pharmaceuticals Common Stock Equity 0.00 0.00 0.00 0.00 14,813 964,466 157

24 Hour Holdings III, LLC

Leisure Goods/Activities/Movies Term Loan Loan 3.75 1.00 0.00 5.05 5/28/2021 $ 485,000 482,182 483,487

ABB Con-Cise Optical Group, LLC

Healthcare & Pharmaceuticals Term Loan B Loan 5.00 1.00 0.00 6.25 6/15/2023 1,985,000 1,965,383 1,987,481

Acosta Holdco, Inc.

Media Term Loan B1 Loan 3.25 1.00 0.00 4.49 9/26/2021 1,940,025 1,930,380 1,732,171

Advantage Sales & Marketing, Inc.

Services: Business Delayed Draw Term Loan Loan 3.25 1.00 0.00 4.55 7/25/2021 2,433,693 2,431,479 2,339,388

Aegis Toxicology Science Corporation

Healthcare & Pharmaceuticals Term B Loan Loan 4.50 1.00 0.00 5.79 2/24/2021 2,450,916 2,338,540 2,431,015

Agrofresh, Inc.

Food Services Term Loan Loan 4.75 1.00 0.00 6.05 7/30/2021 1,960,000 1,953,244 1,942,850

AI MISTRAL T/L (V. GROUP)

Utilities Term Loan Loan 3.00 1.00 0.00 4.24 3/11/2024 498,750 498,750 493,763

Akorn, Inc.

Healthcare & Pharmaceuticals Term Loan B Loan 4.25 1.00 0.00 5.50 4/16/2021 398,056 397,084 402,534

Albertson's LLC

Retailers (Except Food and Drugs) Term Loan B-4 Loan 2.75 0.75 0.00 3.99 8/25/2021 2,667,653 2,651,990 2,582,848

Alere Inc. (fka IM US Holdings, LLC)

Healthcare & Pharmaceuticals Term Loan B Loan 3.25 1.00 0.00 4.49 6/20/2022 913,287 911,647 911,286

Alion Science and Technology Corporation

High Tech Industries Term Loan B (First Lien) Loan 4.50 1.00 0.00 5.74 8/19/2021 2,940,000 2,929,838 2,935,090

Alliance Healthcare Services, Inc.

Healthcare & Pharmaceuticals Term Loan B Loan 3.25 1.00 0.00 4.55 6/3/2019 979,425 976,609 974,528

Almonde, Inc. (Misys)

High Tech Industries Term Loan B Loan 3.50 1.00 0.00 4.82 4/26/2024 1,000,000 995,131 1,004,120

ALPHA 3 T/L B1 (ATOTECH)

Chemicals/Plastics Term Loan B 1 Loan 3.00 1.00 0.00 4.30 1/31/2024 250,000 249,381 250,000

Anchor Glass T/L (11/16)

Containers/Glass Products Term Loan Loan 2.75 1.00 0.00 4.01 12/7/2023 497,500 495,075 498,351

APCO Holdings, Inc.

Automotive Term Loan Loan 6.00 1.00 0.00 7.24 1/31/2022 1,883,581 1,841,381 1,836,492

Aramark Corporation

Food Products U.S. Term F Loan Loan 2.00 0.00 0.00 3.24 3/28/2024 1,995,000 1,995,000 1,999,988

Arctic Glacier U.S.A., Inc.

Beverage, Food & Tobacco Term Loan B Loan 4.25 1.00 0.00 5.49 3/20/2024 498,750 496,338 500,620

ASG Technologies Group, Inc.

High Tech Industries Term Loan Loan 4.75 1.00 0.00 6.06 7/31/2024 500,000 497,515 502,500

Aspen Dental Management, Inc.

Healthcare & Pharmaceuticals Term Loan Initial Loan 3.75 1.00 0.00 5.07 4/29/2022 1,974,867 1,970,938 1,994,616

Astoria Energy T/L B

Utilities Term Loan Loan 4.00 1.00 0.00 5.24 12/24/2021 1,458,457 1,445,001 1,461,199

Asurion, LLC (fka Asurion Corporation)

Insurance Term Loan B4 (First Lien) Loan 2.75 0.00 0.00 3.99 8/4/2022 2,385,687 2,373,815 2,390,912

Asurion, LLC (fka Asurion Corporation)

Insurance Term Loan B5 Loan 3.00 1.00 0.00 4.24 11/3/2023 520,817 516,172 522,770

Auction.com, LLC

Banking, Finance, Insurance & Real Estate Term Loan Loan 5.00 1.00 0.00 6.24 5/13/2019 2,704,799 2,704,613 2,698,037

Avantor Performance Materials Holdings, Inc.

Chemicals/Plastics Term Loan Loan 4.00 1.00 0.00 5.24 3/8/2024 2,992,500 2,985,020 2,991,243

AVOLON TLB BORROWER 1 LUXEMBOURG S.A.R.L.

Capital Equipment Term Loan B-2 Loan 2.75 0.75 0.00 3.98 3/20/2022 1,000,000 995,395 1,002,720

Bass Pro Group, LLC

Retailers (Except Food and Drugs) Term Loan Loan 3.25 0.75 0.00 4.48 6/5/2020 1,466,250 1,464,471 1,457,702

Blackboard T/L B4

High Tech Industries Term Loan B4 Loan 5.00 1.00 0.00 6.30 6/30/2021 2,977,500 2,956,964 2,929,116

Blucora, Inc.

High Tech Industries Term Loan B Loan 3.75 1.00 0.00 5.04 5/22/2024 960,000 955,376 969,600

BMC Software

Technology Term Loan Loan 4.00 1.00 0.00 5.30 9/12/2022 1,941,323 1,885,799 1,934,043

BMC Software T/L US

Technology Term Loan Loan 4.00 1.00 0.00 5.24 9/12/2022 586,972 577,295 588,686

Brickman Group Holdings, Inc.

Brokers/Dealers/Investment Houses Initial Term Loan (First Lien) Loan 3.00 1.00 0.00 4.24 12/18/2020 1,427,946 1,418,213 1,432,230

Cable One, Inc.

Telecommunications Term Loan B Loan 2.25 0.00 0.00 3.57 5/1/2024 500,000 499,375 501,250

Candy Intermediate Holdings, Inc.

Beverage, Food & Tobacco Term Loan Loan 4.50 1.00 0.00 5.80 6/15/2023 495,000 492,981 479,224

Canyon Valor Companies, Inc.

High Tech Industries Term Loan B Loan 4.25 0.00 0.00 5.50 6/16/2023 1,000,000 997,500 1,007,140

Capital Automotive L.P.

Conglomerate Tranche B-1 Term Loan Facility Loan 3.00 1.00 0.00 4.24 3/25/2024 490,301 487,934 492,404

Caraustar Industries Inc.

Forest Products & Paper Term Loan B Loan 5.50 1.00 0.00 6.80 3/14/2022 498,750 497,514 493,264

CareerBuilder, LLC

Services: Business Term Loan Loan 6.75 1.00 0.00 8.01 7/31/2023 2,500,000 2,427,878 2,443,750

CASA SYSTEMS T/L

Telecommunications Term Loan Loan 4.00 1.00 0.00 5.30 12/20/2023 1,492,500 1,478,808 1,499,963

Catalent Pharma Solutions, Inc

Drugs Initial Term B Loan Loan 2.75 1.00 0.00 3.99 5/20/2021 422,298 421,090 424,232

Cengage Learning Acquisitions, Inc.

Publishing Term Loan Loan 4.25 1.00 0.00 5.48 6/7/2023 1,464,371 1,449,727 1,359,419

CenturyLink, Inc.

Telecommunications Term Loan B Loan 2.75 0.00 0.00 2.75 1/31/2025 3,000,000 2,992,505 2,932,500

CH HOLD (CALIBER COLLISION) T/L

Automotive Term Loan Loan 3.00 0.00 0.00 4.24 2/1/2024 247,917 247,406 248,742

Charter Communications Operating, LLC

Cable and Satellite Television Term F Loan Loan 2.00 0.00 0.00 3.24 1/3/2021 1,601,194 1,595,956 1,604,749

CHS/Community Health Systems, Inc.

Healthcare & Pharmaceuticals Term G Loan Loan 2.75 1.00 0.00 4.07 12/31/2019 719,623 707,383 717,198

CHS/Community Health Systems, Inc.

Healthcare & Pharmaceuticals Term H Loan Loan 3.00 1.00 0.00 4.32 1/27/2021 1,328,771 1,289,676 1,321,410

CITGO Petroleum Corporation

Oil & Gas Term Loan B Loan 3.50 1.00 0.00 4.80 7/29/2021 1,954,823 1,938,276 1,952,380

Communications Sales & Leasing, Inc.

Telecommunications Term Loan B (First Lien) Loan 3.00 1.00 0.00 4.24 10/24/2022 1,960,212 1,949,526 1,897,113

Concordia Healthcare Corporation

Healthcare & Pharmaceuticals Term Loan B Loan 4.25 1.00 0.00 5.48 10/21/2021 1,955,000 1,875,901 1,385,880

Consolidated Aerospace Manufacturing, LLC

Aerospace and Defense Term Loan (First Lien) Loan 3.75 1.00 0.00 4.99 8/11/2022 1,418,750 1,413,340 1,390,375

Consolidated Communications, Inc.

Telecommunications Term Loan B-2 Loan 3.00 1.00 0.00 4.24 10/5/2023 500,000 497,515 490,355

CPI Acquisition Inc.

Technology Term Loan B (First Lien) Loan 4.50 1.00 0.00 5.96 8/17/2022 1,436,782 1,420,218 933,908

Crosby US Acquisition Corporation

Industrial Equipment Initial Term Loan (First Lien) Loan 3.00 1.00 0.00 4.32 11/23/2020 723,750 723,313 659,517

CT Technologies Intermediate Hldgs, Inc

Healthcare & Pharmaceuticals Term Loan Loan 4.25 1.00 0.00 5.49 12/1/2021 1,462,650 1,452,569 1,463,571

Culligan International Company-T/L

Conglomerate Term Loan Loan 4.00 1.00 0.00 5.00 12/13/2023 2,039,750 2,039,843 2,053,784

Culligan International Company-T/L

Utilities Incremental Term Loan B Loan 3.25 1.00 0.00 4.49 12/13/2023 500,000 499,375 500,940

Cumulus Media Holdings Inc.

Broadcast Radio and Television Term Loan Loan 3.25 1.00 0.00 4.49 12/23/2020 448,889 446,593 366,742

Cypress Intermediate Holdings III, Inc.

Services: Business Term Loan B Loan 3.00 1.00 0.00 4.24 4/29/2024 500,000 498,811 498,875

DAE Aviation (StandardAero)

Aerospace and Defense Term Loan Loan 3.75 1.00 0.00 4.99 7/7/2022 2,463,731 2,454,251 2,482,825

DAE Aviation (StandardAero)

Aerospace and Defense Term Loan Loan 3.75 1.00 0.00 4.99 7/7/2022 1,000,000 998,750 1,002,500

Daseke Companies, Inc.

Transportation Term Loan Loan 7.44 1.00 0.00 8.75 2/27/2024 105,143 105,143 105,800

DASEKE T/L (HENNESSY CAPITAL)

Transportation Term Loan Loan 5.50 1.00 0.00 6.74 2/27/2024 825,075 818,348 830,232

DELL INTERNATIONAL 1ST LIEN T/L

High Tech Industries Term Loan (01/17) Loan 2.50 0.75 0.00 3.74 9/7/2023 995,000 993,947 998,691

Delta 2 (Lux) S.a.r.l.

Lodging & Casinos Term Loan B-3 Loan 3.25 1.00 0.00 4.49 2/1/2024 1,500,000 1,496,964 1,508,745

DEX MEDIA, INC.

Media Term Loan (07/16) Loan 10.00 1.00 0.00 11.24 7/29/2021 35,702 35,702 36,684

DHX Media Ltd.

Media Term Loan Loan 3.25 1.00 0.00 4.49 12/29/2023 500,000 497,556 501,875

Diamond (BC) B.V.

Consumer Goods: Non-Durable Term Loan Loan 3.00 0.00 0.00 4.32 7/25/2024 500,000 498,750 496,565

DIGITALGLOBE T/L B (12/16)

Aerospace and Defense Term Loan B Loan 2.75 0.75 0.00 3.99 1/15/2024 497,500 496,388 496,878

DJO Finance, LLC

Healthcare & Pharmaceuticals Term Loan Loan 3.25 1.00 0.00 4.49 6/8/2020 490,000 488,672 487,447

Dole Food Company, Inc.

Beverage, Food & Tobacco Term Loan B Loan 2.75 1.00 0.00 4.01 4/8/2024 500,000 497,596 501,015

Drew Marine Group, Inc.

Chemicals/Plastics Term Loan (First Lien) Loan 3.50 1.00 0.00 4.74 11/19/2020 2,863,470 2,841,317 2,856,311

DTZ U.S. Borrower, LLC

Construction & Building Term Loan B Add-on Loan 3.25 1.00 0.00 4.57 11/4/2021 1,952,594 1,944,254 1,955,738

DUKE FINANCE (OM GROUP/VECTRA) T/L

Banking, Finance, Insurance & Real Estate Term Loan Loan 4.25 1.00 0.00 5.51 2/21/2024 1,481,288 1,378,582 1,484,991

Edelman Financial Group, Inc.

Banking, Finance, Insurance & Real Estate Term Loan Loan 5.50 1.00 0.00 6.81 12/19/2022 1,474,728 1,451,180 1,474,728

Education Management II, LLC

Leisure Goods/Activities/Movies Term Loan A Loan 4.50 1.00 0.00 5.80 7/2/2020 501,970 490,615 220,867

Education Management II, LLC

Leisure Goods/Activities/Movies Term Loan B (2.00% Cash/6.50% PIK) Loan 1.00 1.00 6.50 8.80 7/2/2020 954,307 936,841 10,736

EIG Investors Corp.

High Tech Industries Term Loan Loan 4.00 1.00 0.00 5.32 2/9/2023 496,027 494,787 500,883

Emerald 2 Limited

Chemicals/Plastics Term Loan B1A Loan 4.00 1.00 0.00 5.30 5/14/2021 1,000,000 993,668 977,500

Emerald Performance Materials, LLC

Chemicals/Plastics Term Loan (First Lien) Loan 3.50 1.00 0.00 4.74 8/1/2021 480,448 479,012 482,452

Emerald Performance Materials, LLC

Chemicals/Plastics Term Loan (Second Lien) Loan 7.75 1.00 0.00 8.99 8/1/2022 500,000 498,295 498,750

Endo International plc

Healthcare & Pharmaceuticals Term Loan B Loan 4.25 0.75 0.00 5.50 4/29/2024 1,000,000 995,135 1,006,560

Engility Corporation

Aerospace and Defense Term Loan B-1 Loan 2.75 0.00 0.00 3.99 8/12/2020 231,250 230,388 231,974

Engineered Machinery Holdings, Inc.

Capital Equipment Delayed Draw Term Loan Loan 5.19 1.00 0.00 6.50 7/19/2024 44,248 44,248 44,192

Engineered Machinery Holdings, Inc.

Capital Equipment Term Loan B Loan 3.25 1.00 0.00 4.56 7/19/2024 442,478 441,372 441,925

Equian, LLC

Services: Business Term Loan B Loan 3.75 1.00 0.00 5.07 5/20/2024 1,529,412 1,519,629 1,542,794

Equian, LLC

Services: Business Delayed Draw Term Loan Loan 3.75 1.00 0.00 5.05 5/20/2024 235,294 235,294 237,353

Evergreen Acqco 1 LP

Retailers (Except Food and Drugs) New Term Loan Loan 3.75 1.25 0.00 5.06 7/9/2019 950,119 946,962 883,135

EWT Holdings III Corp. (fka WTG Holdings III Corp.)

Industrial Equipment Term Loan (First Lien) Loan 3.75 1.00 0.00 5.05 1/15/2021 3,210,537 3,197,956 3,242,642

Extreme Reach, Inc.

Media Term Loan B Loan 6.25 1.00 0.00 7.55 2/7/2020 2,775,000 2,753,177 2,768,063

Federal-Mogul Corporation

Automotive Tranche C Term Loan Loan 3.75 1.00 0.00 4.98 4/15/2021 2,296,974 2,289,914 2,304,163

FinCo I LLC

Banking, Finance, Insurance & Real Estate Term Loan B Loan 1.38 0.00 0.00 1.38 6/14/2022 500,000 498,793 504,000

First Data Corporation

Financial Intermediaries First Data T/L Ext (2021) Loan 2.50 0.00 0.00 3.74 4/26/2024 1,864,542 1,792,211 1,864,933

First Eagle Investment Management

Banking, Finance, Insurance & Real Estate Term Loan Loan 3.50 0.75 0.00 4.80 12/1/2022 2,481,250 2,453,237 2,505,293

Fitness International, LLC

Leisure Goods/Activities/Movies Term Loan B Loan 4.25 1.00 0.00 5.49 7/1/2020 1,624,755 1,606,031 1,638,566

Gates Global LLC

Leisure Goods/Activities/Movies Term Loan (First Lien) Loan 3.25 1.00 0.00 4.55 4/1/2024 349,011 345,699 349,964

General Nutrition Centers, Inc.

Retailers (Except Food and Drugs) Amended Tranche B Term Loan Loan 2.50 0.75 0.00 3.74 3/4/2019 2,047,169 2,044,530 1,930,317

Global Tel*Link Corporation

Services: Business Term Loan (First Lien) Loan 4.00 1.25 0.00 5.30 5/26/2020 3,134,046 3,128,201 3,154,417

GLOBALLOGIC HOLDINGS INC TERM LOAN B

Services: Business Term Loan B Loan 4.50 1.00 0.00 5.80 6/20/2022 498,750 494,304 499,997

Goodyear Tire & Rubber Company, The

Chemicals/Plastics Loan (Second Lien) Loan 2.00 0.00 0.00 3.23 4/30/2019 1,833,333 1,823,483 1,835,625

Grosvenor Capital Management Holdings, LP

Brokers/Dealers/Investment Houses Initial Term Loan Loan 3.00 1.00 0.00 4.24 8/18/2023 997,481 992,679 999,975

Hargray Communications Group, Inc.

Media Term Loan B Loan 3.00 1.00 0.00 4.24 2/9/2022 1,000,000 997,535 1,000,000

Harland Clarke Holdings Corp. (fka Clarke American Corp.)

Publishing Tranche B-4 Term Loan Loan 5.50 1.00 0.00 6.80 2/9/2022 2,148,828 2,094,599 2,155,554

HD Supply Waterworks, Ltd.

Construction & Building Term Loan Loan 3.00 1.00 0.00 4.46 8/1/2024 500,000 498,758 500,625

Heartland Dental, LLC

Services: Consumer Term Loan Loan 4.75 1.00 0.00 6.06 7/31/2023 3,000,000 2,985,015 3,000,000

Helix Gen Funding, LLC

Utilities Term Loan B Loan 3.75 1.00 0.00 4.96 5/3/2024 479,104 476,900 483,349

Help/Systems Holdings, Inc.

High Tech Industries Term Loan Loan 4.50 1.00 0.00 5.80 10/8/2021 1,349,392 1,298,024 1,352,766

Hemisphere Media Holdings, LLC

Media Term Loan B Loan 3.50 0.00 0.00 4.74 2/14/2024 2,487,500 2,499,377 2,490,609

Herbalife T/L B (HLF Financing)

Drugs Term Loan B Loan 5.50 0.75 0.00 6.74 2/15/2023 1,962,500 1,949,117 1,971,096

Hercules Achievement Holdings, Inc.

Retailers (Except Food and Drugs) Term Loan B Loan 3.50 1.00 0.00 4.74 12/10/2021 245,592 243,758 246,820

Highline Aftermarket Acquisition, LLC

Automotive Term Loan B Loan 4.25 1.00 0.00 5.56 3/15/2024 997,500 992,512 1,002,488

Hoffmaster Group, Inc.

Containers/Glass Products Term Loan Loan 4.50 1.00 0.00 5.80 11/21/2023 995,000 998,513 1,002,463

Hostess Brand, LLC

Beverage, Food & Tobacco Term Loan B (First Lien) Loan 2.50 0.75 0.00 3.74 8/3/2022 1,486,275 1,482,613 1,489,619

HUB International Limited

Banking, Finance, Insurance & Real Estate Term Loan B Loan 3.00 1.00 0.00 4.31 10/2/2022 746,144 746,144 748,367

Husky Injection Molding Systems Ltd.

Services: Business Term Loan B Loan 3.25 1.00 0.00 4.49 6/30/2021 445,844 443,968 447,516

Hyland Software, Inc.

High Tech Industries Term Loan B Loan 3.25 0.75 0.00 4.49 7/1/2022 1,000,000 997,506 1,007,500

Hyperion Refinance T/L

Banking, Finance, Insurance & Real Estate Term Loan Loan 4.00 1.00 0.00 5.25 4/29/2022 1,877,293 1,856,318 1,899,820

ICSH Parent, Inc.

Containers/Glass Products Term Loan Loan 4.00 1.00 0.00 5.32 4/29/2024 847,059 842,999 847,059

ICSH Parent, Inc.

Containers/Glass Products Delayed Draw Term Loan Loan 4.00 1.00 0.00 5.32 4/29/2024 46,353 46,353 46,353

Idera, Inc.

High Tech Industries Term Loan B Loan 5.00 1.00 0.00 6.00 6/28/2024 1,690,909 1,674,000 1,690,909

IG Investments Holdings, LLC

Services: Business Term Loan Loan 4.00 1.00 0.00 5.30 10/29/2021 3,432,539 3,419,826 3,452,551

Infor US (Lawson) T/L B-6

Services: Business Term Loan B-6 Loan 2.75 1.00 0.00 4.05 2/1/2022 1,605,777 1,592,693 1,601,265

Informatica Corporation

High Tech Industries Term Loan B Loan 3.50 1.00 0.00 4.80 8/5/2022 484,433 483,517 484,738

Inmar, Inc.

Services: Business Term Loan B Loan 3.50 1.00 0.00 4.76 5/1/2024 500,000 495,138 500,315

J. Crew Group, Inc.

Retailers (Except Food and Drugs) Term B-1 Loan Retired 03/05/2014 Loan 3.22 1.00 0.00 4.52 3/5/2021 834,971 834,971 486,629

J.Jill Group, Inc.

Retailers (Except Food and Drugs) Term Loan (First Lien) Loan 5.00 1.00 0.00 6.32 5/9/2022 876,934 873,747 857,203

Jazz Acquisition, Inc

Aerospace and Defense First Lien 6/14 Loan 3.50 1.00 0.00 4.80 6/19/2021 485,455 484,729 471,294

Kinetic Concepts, Inc.

Healthcare & Pharmaceuticals Term Loan F-1 Loan 3.25 1.00 0.00 4.55 2/2/2024 2,400,000 2,389,238 2,373,000

Koosharem, LLC

Services: Business Term Loan Loan 6.50 1.00 0.00 7.80 5/15/2020 2,920,125 2,905,387 2,737,617

Lannett Company, Inc.

Healthcare & Pharmaceuticals Term Loan B Loan 5.38 1.00 0.00 6.62 11/25/2022 2,850,000 2,798,349 2,821,500

LEARFIELD COMMUNICATIONS INITIAL T/L (A-L PARENT)

Healthcare & Pharmaceuticals Initial Term Loan (A-L Parent) Loan 3.25 1.00 0.00 4.49 12/1/2023 497,500 495,311 499,679

Lightstone Generation T/L B

Utilities Term Loan C Loan 4.50 1.00 0.00 5.74 1/30/2024 57,971 56,866 57,699

Lightstone Generation T/L C

Utilities Term Loan B Refinancing Loan 4.50 1.00 0.00 5.74 1/30/2024 930,362 912,678 925,999

Limetree Bay Terminals T/L (01/17)

Oil & Gas Term Loan Loan 4.00 1.00 0.00 5.23 2/15/2024 498,750 494,192 505,608

Liquidnet Holdings, Inc.

Banking, Finance, Insurance & Real Estate Term Loan B Loan 4.25 1.00 0.00 5.48 7/15/2024 500,000 495,020 500,000

LPL Holdings

Banking, Finance, Insurance & Real Estate Term Loan B (2022) Loan 2.50 0.00 0.00 3.73 3/11/2024 1,745,625 1,741,382 1,748,540

McGraw-Hill Global Education Holdings, LLC

Publishing Term Loan Loan 4.00 1.00 0.00 5.24 5/4/2022 990,000 986,218 970,448

MHVC Acquisition Corp.

Aerospace and Defense Term Loan Loan 5.25 1.00 0.00 6.49 4/29/2024 2,000,000 1,990,197 2,025,000

Michaels Stores, Inc.

Retailers (Except Food and Drugs) Term Loan B1 Loan 2.75 1.00 0.00 3.99 1/30/2023 1,670,514 1,665,413 1,666,856

Micro Holding Corporation

High Tech Industries Term Loan Loan 3.75 1.00 0.00 4.99 7/8/2021 1,475,684 1,471,584 1,471,626

Midas Intermediate Holdco II, LLC

Automotive Term Loan (Initial) Loan 2.75 1.00 0.00 4.05 8/18/2021 243,153 242,374 242,647

Midwest Physician Administrative Services LLC

Healthcare & Pharmaceuticals Term Loan Loan 3.00 0.75 0.00 4.32 8/15/2024 1,000,000 995,097 997,500

Milacron T/L B

Capital Equipment Term Loan B Loan 3.00 0.00 0.00 4.24 9/28/2023 995,000 991,655 997,905

Milk Specialties Company

Beverage, Food & Tobacco Term Loan Loan 4.00 1.00 0.00 5.30 8/16/2023 992,500 983,390 999,944

Mister Car Wash T/L

Automotive Term Loan Loan 3.75 1.00 0.00 5.03 8/20/2021 1,491,470 1,486,113 1,493,961

MWI Holdings, Inc.

Capital Equipment Term Loan (First Lien) Loan 5.50 1.00 0.00 6.80 6/29/2020 2,970,000 2,946,207 2,970,000

New Media Holdings II T/L (NEW)

Retailers (Except Food and Drugs) Term Loan Loan 6.25 1.00 0.00 7.49 6/4/2020 4,151,952 4,130,494 4,138,998

New Millennium Holdco, Inc.

Healthcare & Pharmaceuticals Term Loan Loan 6.50 1.00 0.00 7.74 12/21/2020 1,920,070 1,791,552 1,056,039

Novetta Solutions

Aerospace and Defense Term Loan (200MM) Loan 5.00 1.00 0.00 6.30 10/16/2022 1,970,000 1,954,718 1,896,125

Novetta Solutions

Aerospace and Defense Term Loan (2nd Lien) Loan 8.50 1.00 0.00 9.80 10/16/2023 1,000,000 991,731 940,000

NPC International, Inc.

Food Services Term Loan (2013) Loan 3.50 1.00 0.00 4.74 4/19/2024 500,000 499,388 502,500

NVA Holdings (National Veterinary) T/L B2

Services: Consumer Term Loan B2 Loan 3.50 1.00 0.00 4.80 8/14/2021 1,507,950 1,503,536 1,513,605

NXT Capital T/L (11/16)

Banking, Finance, Insurance & Real Estate Term Loan Loan 4.50 1.00 0.00 5.74 11/23/2022 1,244,373 1,239,598 1,263,039

Onex Carestream Finance LP

Healthcare & Pharmaceuticals Term Loan (First Lien 2013) Loan 4.00 1.00 0.00 5.30 6/7/2019 3,504,053 3,494,910 3,496,940

OnexYork Acquisition Co

Healthcare & Pharmaceuticals Term Loan B Loan 3.75 1.00 0.00 4.99 10/1/2021 486,250 483,977 478,499

OpenLink International, LLC

Services: Business Term B Loan Loan 6.50 1.25 0.00 7.81 7/29/2019 2,898,488 2,898,374 2,893,068

P.F. Chang's China Bistro, Inc.

Food/Drug Retailers Term B Loan Loan 3.25 1.00 0.00 4.48 6/24/2019 589,978 572,278 572,278

P.F. Chang's China Bistro, Inc. (Wok Acquisition Corp.)

Food/Drug Retailers Term B Loan Loan 3.25 1.00 0.00 4.48 6/24/2019 1,410,022 1,406,954 1,404,735

P2 Upstream Acquisition Co. (P2 Upstream Canada BC ULC)

Services: Business Term Loan (First Lien) Loan 4.00 1.00 0.00 5.32 10/30/2020 965,000 962,318 942,487

Petsmart, Inc. (Argos Merger Sub, Inc.)

Retailers (Except Food and Drugs) Term Loan B1 Loan 3.00 1.00 0.00 4.24 3/11/2022 977,500 973,373 857,404

PGX Holdings, Inc.

Financial Intermediaries Term Loan Loan 5.25 1.00 0.00 6.49 9/29/2020 2,851,534 2,838,455 2,853,331

Pike Corporation

Construction & Building Term Loan B Loan 3.75 1.00 0.00 4.99 3/8/2024 498,750 496,459 503,428

Planet Fitness Holdings LLC

Leisure Goods/Activities/Movies Term Loan Loan 3.00 0.75 0.00 4.24 3/31/2021 2,380,349 2,374,116 2,395,226

Polycom Term Loan (9/16)

Telecommunications Term Loan Loan 5.25 1.00 0.00 6.49 9/27/2023 1,733,167 1,711,253 1,754,398

PrePaid Legal Services, Inc.

Services: Business Term Loan B Loan 5.25 1.25 0.00 6.50 7/1/2019 3,103,532 3,106,156 3,120,012

Presidio, Inc.

Services: Business Term Loan Loan 3.25 1.00 0.00 4.55 2/2/2022 1,997,270 1,941,849 2,003,921

Prestige Brands T/L B4

Drugs Term Loan B4 Loan 2.75 0.75 0.00 3.99 1/26/2024 456,202 455,187 456,699

Prime Security Services (Protection One)

Services: Business Term Loan Loan 2.75 1.00 0.00 3.99 5/2/2022 1,980,062 1,970,444 1,988,735

Project Leopard Holdings, Inc.

High Tech Industries Term Loan Loan 5.50 1.00 0.00 6.76 7/7/2023 500,000 498,765 502,500

Project Silverback Holdings Corp.

High Tech Industries Term Loan B Loan 4.00 1.00 0.00 5.32 8/21/2024 1,000,000 997,500 1,000,000

Radio Systems Corporation

Leisure Goods/Activities/Movies Term Loan Loan 3.50 1.00 0.00 4.74 5/2/2024 1,500,000 1,500,000 1,511,250

Ranpak Holdings, Inc.

Services: Business Term Loan Loan 3.25 1.00 0.00 4.49 10/1/2021 911,385 909,107 911,385

Redtop Acquisitions Limited

Electronics/Electric Initial Dollar Term Loan (First Lien) Loan 3.50 1.00 0.00 4.81 12/3/2020 482,537 480,782 482,841

Research Now Group, Inc

Media Term Loan B Loan 4.50 1.00 0.00 5.80 3/18/2021 2,004,470 1,997,380 1,994,448

Resolute Investment Managers, Inc.

Banking, Finance, Insurance & Real Estate Term Loan Loan 4.25 1.00 0.00 5.55 4/30/2022 726,591 725,217 733,856

Reynolds Group Holdings Inc.

Industrial Equipment Incremental U.S. Term Loan Loan 3.00 0.00 0.00 4.24 2/3/2023 1,752,329 1,752,329 1,753,485

RGIS Services, LLC

Services: Business Term Loan Loan 7.50 1.00 0.00 8.80 3/31/2023 498,750 491,591 455,109

Robertshaw US Holding Corp.

Consumer Goods: Durable Term Loan Loan 4.50 1.00 0.00 5.75 8/12/2024 500,000 496,250 502,815

Rovi Solutions Corporation / Rovi Guides, Inc.

Electronics/Electric Tranche B-3 Term Loan Loan 2.50 0.75 0.00 3.74 7/2/2021 1,455,000 1,450,798 1,456,557

Royal Holdings T/L (02/17)

Chemicals/Plastics Term Loan (Second Lien) Loan 3.25 1.00 0.00 4.55 6/17/2022 540,253 537,980 542,954

Russell Investment Management T/L B

Banking, Finance, Insurance & Real Estate Term Loan B Loan 4.25 1.00 0.00 5.49 6/1/2023 2,228,744 2,123,972 2,238,506

Sable International Finance Ltd

Telecommunications Term Loan B2 Loan 3.50 0.00 0.00 4.74 1/31/2025 2,500,000 2,487,515 2,485,950

Sally Holdings, LLC

Retail Term Loan B1 Loan 2.50 0.00 0.00 3.75 7/5/2024 1,000,000 995,057 996,250

Sally Holdings, LLC

Retail Term Loan (Fixed) Loan 4.50 0.00 0.00 4.50 7/5/2024 1,000,000 995,002 1,005,000

SBP Holdings LP

Industrial Equipment Term Loan (First Lien) Loan 4.00 1.00 0.00 5.24 3/27/2021 967,500 964,802 888,291

SCS Holdings (Sirius Computer)

High Tech Industries Term Loan (First Lien) Loan 4.25 1.00 0.00 5.49 10/31/2022 1,852,332 1,819,756 1,863,131

Seadrill Operating LP

Oil & Gas Term Loan B Loan 3.00 1.00 0.00 4.30 2/21/2021 972,292 924,066 624,698

SG Acquisition, Inc. (Safe Guard)

Banking, Finance, Insurance & Real Estate Term Loan Loan 5.00 1.00 0.00 6.30 3/29/2024 1,987,500 1,968,665 1,972,594

Shearers Foods LLC

Food Services Term Loan (First Lien) Loan 3.94 1.00 0.00 5.24 6/30/2021 972,500 971,037 972,092

Sitel Worldwide

Telecommunications Term Loan Loan 5.50 1.00 0.00 6.81 9/18/2021 1,965,000 1,951,088 1,961,325

SMB Shipping Logistics T/L B (REP WWEX Acquisition)

Transportation Term Loan B Loan 4.50 1.00 0.00 5.95 2/2/2024 997,500 993,052 999,166

Sonneborn, LLC

Chemicals/Plastics Term Loan (First Lien) Loan 3.75 1.00 0.00 4.99 12/10/2020 206,920 206,619 207,954

Sonneborn, LLC

Chemicals/Plastics Initial US Term Loan Loan 3.75 1.00 0.00 4.99 12/10/2020 1,172,545 1,170,841 1,178,408

Sophia, L.P.

Electronics/Electric Term Loan (Closing Date) Loan 3.25 1.00 0.00 4.55 9/30/2022 1,935,931 1,927,351 1,932,601

SRAM, LLC

Industrial Equipment Term Loan (First Lien) Loan 3.50 1.00 0.00 4.76 3/15/2024 2,600,800 2,579,942 2,613,804

Staples, Inc.

Retail Term Loan B Loan 4.00 1.00 0.00 5.31 8/15/2024 2,000,000 1,995,000 1,989,540

Steak ‘n Shake Operations, Inc.

Food Services Term Loan Loan 3.75 1.00 0.00 4.99 3/19/2021 849,991 845,318 824,491

Survey Sampling International

Services: Business Term Loan B Loan 5.00 1.00 0.00 6.30 12/16/2020 2,707,893 2,695,815 2,667,274

Sybil Finance BV

High Tech Industries Term Loan B Loan 3.25 1.00 0.00 4.50 9/29/2023 975,156 971,083 980,237

Syncsort Incorporated

High Tech Industries Term Loan B Loan 5.00 1.00 0.00 6.00 8/16/2024 2,000,000 1,980,000 1,980,500

Syniverse Holdings, Inc.

Telecommunications Initial Term Loan Loan 3.00 1.00 0.00 4.31 4/23/2019 468,409 466,861 448,501

Townsquare Media, Inc.

Media Term Loan B Loan 3.00 1.00 0.00 4.30 4/1/2022 911,712 907,640 911,712

TransDigm, Inc.

Aerospace and Defense Tranche C Term Loan Loan 3.00 0.75 0.00 4.26 2/28/2020 4,211,151 4,218,677 4,214,898

Travel Leaders Group, LLC

Hotel, Gaming and Leisure Term Loan B Loan 4.50 0.00 0.00 5.81 1/25/2024 1,995,000 1,985,216 2,009,125

TRC Companies, Inc.

Services: Business Term Loan Loan 4.00 1.00 0.00 5.23 6/21/2024 3,000,000 2,985,204 3,007,500

Truck Hero, Inc. (Tectum Holdings)

Transportation Term Loan B Loan 4.00 1.00 0.00 5.23 4/22/2024 2,000,000 1,980,517 1,997,500

Trugreen Limited Partnership

Services: Business Term Loan B Loan 4.00 1.00 0.00 5.23 4/13/2023 495,000 487,643 499,950

Twin River Management Group, Inc.

Lodging & Casinos Term Loan B Loan 3.50 1.00 0.00 4.80 7/10/2020 790,346 791,422 794,796

Univar Inc.

Chemicals/Plastics Term B Loan Loan 2.75 0.00 0.00 3.99 7/1/2022 2,947,688 2,934,692 2,949,987

Univision Communications Inc.

Telecommunications Replacement First-Lien Term Loan Loan 2.75 1.00 0.00 3.99 3/15/2024 2,870,189 2,852,951 2,845,849

UOS, LLC (Utility One Source)

Capital Equipment Term Loan B Loan 5.50 1.00 0.00 6.80 4/18/2023 500,000 495,186 509,065

Valeant Pharmaceuticals International, Inc.

Drugs Series D2 Term Loan B Loan 4.75 0.75 0.00 5.99 4/1/2022 1,482,063 1,482,063 1,507,080

Virtus Investment Partners, Inc.

Banking, Finance, Insurance & Real Estate Term Loan B Loan 3.75 0.75 0.00 4.95 6/3/2024 500,000 497,580 505,625

Vizient Inc.

Healthcare & Pharmaceuticals Term Loan Loan 3.50 1.00 0.00 4.74 2/13/2023 879,853 858,575 888,651

Washington Inventory Service

High Tech Industries U.S. Term Loan (First Lien) Loan 0.00 0.00 6.00 7.22 12/20/2018 1,108,260 1,121,429 978,039

Western Dental Services, Inc.

Retail Term Loan B Loan 5.25 1.00 0.00 6.49 6/30/2023 2,000,000 1,980,073 2,000,000

Western Digital Corporation

High Tech Industries Term Loan B (USD) Loan 2.75 0.75 0.00 3.98 4/28/2023 1,584,040 1,539,726 1,591,517

Windstream Services, LLC

Telecommunications Term Loan B6 Loan 4.00 0.75 0.00 5.27 3/29/2021 994,366 985,495 905,867

Xerox Business Services T/L B (Conduent)

Services: Business Term Loan Loan 4.00 0.00 0.00 5.24 12/7/2023 746,250 734,919 752,220

ZEP, Inc.

Chemicals/Plastics Term Loan B Loan 4.00 1.00 0.00 5.23 6/27/2022 2,500,000 2,487,507 2,502,075

Zest Holdings 1st Lien T/L (2014 Replacement)

Healthcare & Pharmaceuticals Term Loan Loan 4.25 1.00 0.00 5.49 8/16/2023 997,500 992,766 1,003,315

$ 301,224,354 $ 294,524,652

Principal Cost Fair Value

Cash and cash equivalents

U.S. Bank Money Market (a)

$ 7,475,599 $ 7,475,599 $ 7,475,599

Total cash and cash equivalents

$ 7,475,599 $ 7,475,599 $ 7,475,599

(a)    Included within cash and cash equivalents in Saratoga CLO's Statements of Assets and Liabilities as of August 31, 2017.

22

Table of Contents

Saratoga Investment Corp. CLO 2013-1 Ltd.

Schedule of Investments

February 28, 2017

Issuer Name

Industry

Asset Name

Asset
Type
Spread LIBOR
Floor
PIK Current
Rate
(All In)
Maturity
Date
Principal/
Number of
Shares
Cost Fair Value

Education Management II, LLC

Leisure Goods/Activities/Movies A-1 Preferred Shares Equity 0.00 0.00 0.00 0.00 6,692 $ 669,214 $ 6,725

Education Management II, LLC

Leisure Goods/Activities/Movies A-2 Preferred Shares Equity 0.00 0.00 0.00 0.00 18,975 1,897,538 247

New Millennium Holdco, Inc.

Healthcare & Pharmaceuticals Common Stock Equity 0.00 0.00 0.00 0.00 14,813 964,466 15,746

24 Hour Holdings III, LLC

Leisure Goods/Activities/Movies Term Loan Loan 3.75 1.00 0.00 4.75 5/28/2021 $ 487,500 484,284 476,127

ABB Con-Cise Optical Group, LLC

Healthcare & Pharmaceuticals Term Loan B Loan 5.00 1.00 0.00 6.00 6/15/2023 1,995,000 1,975,193 2,009,963

Acosta Holdco, Inc.

Media Term Loan B1 Loan 3.25 1.00 0.00 4.29 9/26/2021 1,940,025 1,929,297 1,893,348

Advantage Sales & Marketing, Inc.

Services: Business Delayed Draw Term Loan Loan 3.25 1.00 0.00 4.25 7/25/2021 2,446,206 2,443,710 2,438,574

Aegis Toxicology Science Corporation

Healthcare & Pharmaceuticals Term B Loan Loan 4.50 1.00 0.00 5.50 2/24/2021 2,463,550 2,337,204 2,412,234

Agrofresh, Inc.

Food Services Term Loan Loan 4.75 1.00 0.00 5.75 7/30/2021 1,970,000 1,962,367 1,898,587

AI MISTRAL T/L (V. GROUP)

Utilities Term Loan Loan 3.00 1.00 0.00 4.00 3/11/2024 500,000 500,000 500,940

Akorn, Inc.

Healthcare & Pharmaceuticals Term Loan B Loan 4.25 1.00 0.00 5.25 4/16/2021 398,056 396,948 403,529

Albertson's LLC

Retailers (Except Food and Drugs) Term Loan B-4 Loan 3.00 0.75 0.00 3.78 8/25/2021 2,896,193 2,879,009 2,931,179

Alere Inc. (fka IM US Holdings, LLC)

Healthcare & Pharmaceuticals Term Loan B Loan 3.25 1.00 0.00 4.25 6/20/2022 917,946 916,144 919,479

Alion Science and Technology Corporation

High Tech Industries Term Loan B (First Lien) Loan 4.50 1.00 0.00 5.50 8/19/2021 2,955,000 2,943,621 2,951,306

Alliance Healthcare Services, Inc.

Healthcare & Pharmaceuticals Term Loan B Loan 3.25 1.00 0.00 4.29 6/3/2019 984,570 981,094 977,184

ALPHA 3 T/L B1 (ATOTECH)

Chemicals/Plastics Term Loan B 1 Loan 3.00 1.00 0.00 4.00 1/31/2024 250,000 249,377 252,500

Anchor Glass T/L (11/16)

Containers/Glass Products Term Loan Loan 3.25 1.00 0.00 4.25 12/7/2023 500,000 497,626 505,780

APCO Holdings, Inc.

Automotive Term Loan Loan 6.00 1.00 0.00 7.00 1/31/2022 1,933,919 1,887,037 1,885,571

Aramark Corporation

Food Products U.S. Term F Loan Loan 2.50 0.75 0.00 3.50 2/24/2021 3,118,358 3,118,358 3,147,327

Aspen Dental Management, Inc.

Healthcare & Pharmaceuticals Term Loan Initial Loan 4.25 1.00 0.00 5.25 4/29/2022 1,484,941 1,481,061 1,491,446

Astoria Energy T/L B

Utilities Term Loan Loan 4.00 1.00 0.00 5.00 12/24/2021 1,495,307 1,480,354 1,499,045

Asurion, LLC (fka Asurion Corporation)

Insurance Replacement Term Loan B-2 Loan 3.25 0.75 0.00 4.03 7/8/2020 531,422 526,976 537,024

Asurion, LLC (fka Asurion Corporation)

Insurance Term Loan B4 (First Lien) Loan 3.25 1.00 0.00 4.25 8/4/2022 2,434,375 2,422,950 2,463,661

Auction.com, LLC

Banking, Finance, Insurance & Real Estate Term Loan Loan 5.00 1.00 0.00 6.00 5/13/2019 2,718,634 2,718,434 2,739,024

Avantor Performance Materials Holdings, Inc.

Chemicals/Plastics Term Loan Loan 5.00 1.00 0.00 6.00 6/21/2022 2,784,429 2,760,689 2,819,234

AVOLON TLB BORROWER 1 LUXEMBOURG S.A.R.L.

Capital Equipment Term Loan B-2 Loan 2.75 0.75 0.00 3.50 3/20/2022 1,000,000 995,000 1,017,300

Bass Pro Group, LLC

Retailers (Except Food and Drugs) Term Loan Loan 3.25 0.75 0.00 4.02 6/5/2020 1,473,750 1,471,637 1,411,116

Belmond Interfin Ltd.

Lodging & Casinos Term Loan Loan 3.00 1.00 0.00 4.00 3/19/2021 2,481,122 2,484,502 2,488,888

BJ's Wholesale Club, Inc.

Food/Drug Retailers New 2013 (November) Replacement Loan (First Lien) Loan 3.75 1.00 0.00 4.75 2/2/2024 1,500,000 1,496,335 1,487,385

Blackboard T/L B4

High Tech Industries Term Loan B4 Loan 5.00 1.00 0.00 6.02 6/30/2021 2,992,500 2,969,529 3,008,390

BMC Software

Technology Term Loan Loan 4.00 1.00 0.00 5.00 9/10/2020 1,959,596 1,917,256 1,965,729

BMC Software T/L US

Technology Term Loan Loan 4.00 1.00 0.00 5.00 9/10/2020 676,193 665,400 679,607

Brickman Group Holdings, Inc.

Brokers/Dealers/Investment Houses Initial Term Loan (First Lien) Loan 3.00 1.00 0.00 4.00 12/18/2020 1,461,186 1,451,382 1,467,952

BWAY Holding Company

Leisure Goods/Activities/Movies Term Loan B Loan 3.25 0.00 0.00 4.75 8/14/2023 1,189,327 1,179,242 1,189,826

Candy Intermediate Holdings, Inc.

Beverage, Food & Tobacco Term Loan Loan 4.50 1.00 0.00 5.50 6/15/2023 497,500 495,317 500,609

Capital Automotive L.P.

Conglomerate Tranche B-1 Term Loan Facility Loan 3.00 1.00 0.00 4.00 4/10/2019 1,487,353 1,489,058 1,500,829

CASA SYSTEMS T/L

Telecommunications Term Loan Loan 4.00 1.00 0.00 5.00 12/20/2023 1,500,000 1,485,318 1,500,000

Catalent Pharma Solutions, Inc

Drugs Initial Term B Loan Loan 2.75 1.00 0.00 3.75 5/20/2021 424,821 423,456 429,953

Cengage Learning Acquisitions, Inc.

Publishing Term Loan Loan 4.25 1.00 0.00 5.25 6/7/2023 1,492,500 1,477,575 1,411,965

CH HOLD (CALIBER COLLISION) T/L

Automotive Term Loan Loan 3.00 0.00 0.00 4.00 2/1/2024 227,273 226,758 229,545

Charter Communications Operating, LLC

Cable and Satellite Television Term F Loan Loan 2.00 0.00 0.00 2.79 1/3/2021 1,609,533 1,603,525 1,617,130

CHS/Community Health Systems, Inc.

Healthcare & Pharmaceuticals Term G Loan Loan 2.75 1.00 0.00 3.80 12/31/2019 981,177 960,939 972,866

CHS/Community Health Systems, Inc.

Healthcare & Pharmaceuticals Term H Loan Loan 3.00 1.00 0.00 4.05 1/27/2021 1,805,352 1,763,950 1,773,940

CITGO Petroleum Corporation

Oil & Gas Term Loan B Loan 3.50 1.00 0.00 4.50 7/29/2021 1,964,874 1,946,245 1,976,172

Communications Sales & Leasing, Inc.

Telecommunications Term Loan B (First Lien) Loan 3.00 1.00 0.00 4.00 10/24/2022 1,970,062 1,958,282 1,980,405

Concordia Healthcare Corporation

Healthcare & Pharmaceuticals Term Loan B Loan 4.25 1.00 0.00 5.25 10/21/2021 1,980,000 1,891,488 1,615,522

Consolidated Aerospace Manufacturing, LLC

Aerospace and Defense Term Loan (First Lien) Loan 3.75 1.00 0.00 4.75 8/11/2022 1,418,750 1,412,839 1,365,547

Consolidated Communications, Inc.

Telecommunications Term Loan B-2 Loan 3.00 1.00 0.00 4.00 10/5/2023 500,000 497,500 502,890

CPI Acquisition Inc.

Technology Term Loan B (First Lien) Loan 4.50 1.00 0.00 5.83 8/17/2022 1,436,782 1,418,783 1,289,511

CPI International Acquisition, Inc. (f/k/a Catalyst Holdings, Inc.)

Electronics/Electric Term B Loan Loan 3.25 1.00 0.00 4.25 11/17/2017 2,462,342 2,461,490 2,457,934

Crosby US Acquisition Corporation

Industrial Equipment Initial Term Loan (First Lien) Loan 3.00 1.00 0.00 4.05 11/23/2020 727,500 726,911 667,329

CT Technologies Intermediate Hldgs, Inc

Healthcare & Pharmaceuticals Term Loan Loan 4.25 1.00 0.00 5.25 12/1/2021 1,470,113 1,458,924 1,389,256

Culligan International Company-T/L

Conglomerate Term Loan Loan 4.00 1.00 0.00 5.00 12/13/2023 2,050,000 2,049,738 2,083,313

Cumulus Media Holdings Inc.

Broadcast Radio and Television Term Loan Loan 3.25 1.00 0.00 4.25 12/23/2020 470,093 467,345 342,580

DAE Aviation (StandardAero)

Aerospace and Defense Term Loan Loan 4.25 1.00 0.00 5.25 7/7/2022 1,975,000 1,967,190 1,987,838

DASEKE T/L (HENNESSY CAPITAL)

Transportation Term Loan Loan 5.50 1.00 0.00 6.50 2/27/2024 714,286 707,143 717,857

DCS Business Services, Inc.

Financial Intermediaries Term B Loan Loan 7.25 1.50 0.00 8.75 3/19/2018 2,101,458 2,096,045 2,101,458

Delta 2 (Lux) S.a.r.l.

Lodging & Casinos Term Loan B-3 Loan 3.75 1.00 0.00 5.07 7/30/2021 1,000,000 996,568 1,002,920

DELL INTERNATIONAL 1ST LIEN T/L

High Tech Industries Term Loan (01/17) Loan 2.50 0.75 0.00 3.25 9/7/2023 1,000,000 998,850 1,006,480

Deluxe Entertainment Service Group, Inc.

Leisure Goods/Activities/Movies Term Loan (Incremental) Loan 6.00 1.00 0.00 7.04 2/28/2020 1,000,000 972,672 997,500

Deluxe Entertainment Service Group, Inc.

Leisure Goods/Activities/Movies Term Loan (First Lien) Loan 5.50 1.00 0.00 6.54 2/28/2020 1,868,084 1,869,141 1,864,199

DEX MEDIA, INC.

Media Term Loan (07/16) Loan 10.00 1.00 0.00 11.00 7/29/2021 43,444 43,444 44,041

Diebold, Inc.

High Tech Industries Term Loan B Loan 4.50 0.75 0.00 5.31 11/6/2023 398,750 395,190 404,731

DIGITALGLOBE T/L B (12/16)

Aerospace and Defense Term Loan B Loan 2.75 0.75 0.00 3.53 1/15/2024 500,000 498,815 502,030

DJO Finance, LLC

Healthcare & Pharmaceuticals Term Loan Loan 3.25 1.00 0.00 4.25 6/8/2020 492,500 490,933 483,388

DPX Holdings B.V.

Healthcare & Pharmaceuticals Term Loan 2015 Incr Dollar Loan 3.25 1.00 0.00 4.25 3/11/2021 2,925,000 2,919,916 2,937,431

Drew Marine Group, Inc.

Chemicals/Plastics Term Loan (First Lien) Loan 3.25 1.00 0.00 4.25 11/19/2020 2,950,591 2,923,591 2,928,461

DTZ U.S. Borrower, LLC

Construction & Building Term Loan B Add-on Loan 3.25 1.00 0.00 4.30 11/4/2021 1,962,557 1,954,741 1,973,703

DUKE FINANCE (OM GROUP/VECTRA) T/L

Banking, Finance, Insurance & Real Estate Term Loan Loan 5.00 1.00 0.00 6.00 2/21/2024 1,500,000 1,395,987 1,511,250

Edelman Financial Group, Inc.

Banking, Finance, Insurance & Real Estate Term Loan Loan 5.50 1.00 0.00 6.51 12/19/2022 1,485,000 1,459,535 1,487,317

Education Management II, LLC

Leisure Goods/Activities/Movies Term Loan A Loan 4.50 1.00 0.00 5.51 7/2/2020 501,970 488,778 177,446

Education Management II, LLC

Leisure Goods/Activities/Movies Term Loan B (2.00% Cash/6.50% PIK) Loan 1.00 1.00 6.50 8.51 7/2/2020 954,307 934,189 77,938

Emerald Performance Materials, LLC

Chemicals/Plastics Term Loan (First Lien) Loan 3.50 1.00 0.00 4.50 8/1/2021 480,756 479,151 483,308

Emerald Performance Materials, LLC

Chemicals/Plastics Term Loan (Second Lien) Loan 7.75 1.00 0.00 8.75 8/1/2022 500,000 498,153 498,595

Emerald 2 Limited

Chemicals/Plastics Term Loan B1A Loan 4.00 1.00 0.00 5.00 5/14/2021 1,000,000 994,172 950,000

Endo International plc

Healthcare & Pharmaceuticals Term Loan B Loan 3.00 0.75 0.00 3.81 9/26/2022 990,000 987,999 994,247

EnergySolutions, LLC

Environmental Industries Term Loan B Loan 5.75 1.00 0.00 6.75 5/29/2020 795,000 785,654 799,969

Engility Corporation

Aerospace and Defense Term Loan B-1 Loan 4.25 0.70 0.00 4.03 8/12/2020 243,750 242,680 245,503

Evergreen Acqco 1 LP

Retailers (Except Food and Drugs) New Term Loan Loan 3.75 1.25 0.00 5.00 7/9/2019 955,106 954,175 846,224

EWT Holdings III Corp. (fka WTG Holdings III Corp.)

Industrial Equipment Term Loan (First Lien) Loan 3.75 1.00 0.00 4.75 1/15/2021 1,947,330 1,943,904 1,954,632

EWT Holdings III Corp.

Capital Equipment Term Loan Loan 4.50 1.00 0.00 5.50 1/15/2021 992,500 984,248 997,463

Extreme Reach, Inc.

Media Term Loan B Loan 6.25 1.00 0.00 7.25 2/7/2020 2,887,500 2,860,092 2,905,547

Federal-Mogul Corporation

Automotive Tranche C Term Loan Loan 3.75 1.00 0.00 4.75 4/15/2021 2,925,000 2,915,873 2,894,434

First Data Corporation

Financial Intermediaries First Data T/L Ext (2021) Loan 3.00 0.70 0.00 3.78 3/24/2021 1,886,914 1,804,119 1,904,010

First Eagle Investment Management

Banking, Finance, Insurance & Real Estate Term Loan Loan 4.00 0.75 0.00 5.00 12/1/2022 1,485,000 1,460,081 1,493,361

Fitness International, LLC

Leisure Goods/Activities/Movies Term Loan B Loan 5.00 1.00 0.00 6.00 7/1/2020 1,929,311 1,905,661 1,947,793

FMG Resources (August 2006) Pty LTD (FMG America Finance, Inc.)

Nonferrous Metals/Minerals Loan Loan 2.75 1.00 0.00 3.75 6/28/2019 801,502 802,865 806,279

Garda World Security Corporation

Services: Business Term B Delayed Draw Loan Loan 3.00 1.00 0.00 4.00 11/6/2020 197,083 196,509 197,822

Garda World Security Corporation

Services: Business Term B Loan Loan 3.00 1.00 0.00 4.00 11/6/2020 770,417 768,226 773,306

Gardner Denver, Inc.

High Tech Industries Initial Dollar Term Loan Loan 3.25 1.00 0.00 4.57 7/30/2020 2,426,061 2,421,316 2,420,263

Gates Global LLC

Leisure Goods/Activities/Movies Term Loan (First Lien) Loan 3.25 1.00 0.00 4.25 7/5/2021 481,656 476,839 481,478

General Nutrition Centers, Inc.

Retailers (Except Food and Drugs) Amended Tranche B Term Loan Loan 2.50 0.75 0.00 3.29 3/4/2019 2,121,102 2,117,573 1,765,817

GLOBALLOGIC HOLDINGS INC TERM LOAN B

Services: Business Term Loan B Loan 4.50 1.00 0.00 5.50 6/20/2022 500,000 495,133 501,250

Global Tel*Link Corporation

Services: Business Term Loan (First Lien) Loan 3.75 1.25 0.00 5.00 5/26/2020 2,667,633 2,661,035 2,654,962

Goodyear Tire & Rubber Company, The

Chemicals/Plastics Loan (Second Lien) Loan 3.00 0.75 0.00 3.78 4/30/2019 1,333,333 1,320,613 1,333,747

Grosvenor Capital Management Holdings, LP

Brokers/Dealers/Investment Houses Initial Term Loan Loan 2.75 1.00 0.00 3.75 1/4/2021 1,014,560 1,011,573 1,010,755

GTCR Valor Companies, Inc.

Services: Business Term Loan B Loan 6.00 1.00 0.00 7.00 6/16/2023 1,492,500 1,436,528 1,501,201

Harland Clarke Holdings Corp. (fka Clarke American Corp.)

Publishing Tranche B-4 Term Loan Loan 5.50 1.00 0.00 6.50 2/9/2022 2,176,889 2,117,378 2,190,495

Headwaters Incorporated

Building & Development Term Loan Loan 3.00 1.00 0.00 4.00 3/24/2022 242,058 241,141 242,784

Help/Systems Holdings, Inc.

High Tech Industries Term Loan Loan 5.25 1.00 0.00 6.25 10/8/2021 1,485,000 1,433,886 1,485,000

Hemisphere Media Holdings, LLC

Media Term Loan B Loan 3.50 0.00 0.00 4.27 2/14/2024 2,500,000 2,512,500 2,493,750

Herbalife T/L B (HLF Financing)

Drugs Term Loan B Loan 5.50 0.75 0.00 6.28 2/15/2023 2,000,000 1,985,000 2,001,660

Hercules Achievement Holdings, Inc.

Retailers (Except Food and Drugs) Term Loan B Loan 4.00 1.00 0.00 5.00 12/10/2021 246,851 244,820 250,431

Hoffmaster Group, Inc.

Containers/Glass Products Term Loan Loan 4.50 1.00 0.00 5.50 11/21/2023 1,000,000 1,003,734 1,013,750

Hostess Brand, LLC

Beverage, Food & Tobacco Term Loan B (First Lien) Loan 3.00 1.00 0.00 4.00 8/3/2022 1,490,000 1,486,482 1,507,508

Huntsman International LLC

Chemicals/Plastics Term Loan B (First Lien) Loan 3.00 0.70 0.00 3.78 4/19/2019 1,518,031 1,510,811 1,525,150

Husky Injection Molding Systems Ltd.

Services: Business Term Loan B Loan 3.25 1.00 0.00 4.25 6/30/2021 469,398 467,182 472,158

Hyperion Refinance T/L

Banking, Finance, Insurance & Real Estate Term Loan Loan 4.50 1.00 0.00 5.50 4/29/2022 1,994,924 1,971,849 1,998,675

Imagine! Print Solutions, Inc.

Media Term Loan B Loan 6.00 1.00 0.00 7.00 3/30/2022 496,250 489,837 499,972

Infor US (Lawson) T/L B-6

Services: Business Term Loan B-6 Loan 2.75 1.00 0.00 3.75 2/1/2022 1,609,802 1,595,316 1,610,945

Informatica Corporation

High Tech Industries Term Loan B Loan 3.50 1.00 0.00 4.50 8/5/2022 493,750 492,732 490,664

Insight Global

Services: Business Term Loan Loan 5.00 1.00 0.00 6.00 10/29/2021 3,450,126 3,434,977 3,471,690

ION Media T/L B

Media Term Loan B Loan 3.50 1.00 0.00 4.50 12/18/2020 500,000 497,615 506,875

J. Crew Group, Inc.

Retailers (Except Food and Drugs) Term B-1 Loan Retired 03/05/2014 Loan 3.00 1.00 0.00 4.00 3/5/2021 945,756 945,756 540,660

Jazz Acquisition, Inc

Aerospace and Defense First Lien 6/14 Loan 3.50 1.00 0.00 4.50 6/19/2021 487,879 487,106 471,208

J.Jill Group, Inc.

Retailers (Except Food and Drugs) Term Loan (First Lien) Loan 5.00 1.00 0.00 6.04 5/9/2022 950,648 946,877 935,200

Kinetic Concepts, Inc.

Healthcare & Pharmaceuticals Term Loan F-1 Loan 4.00 1.00 0.00 4.28 2/2/2024 2,400,000 2,388,246 2,399,496

Koosharem, LLC

Services: Business Term Loan Loan 6.50 1.00 0.00 7.50 5/15/2020 2,935,100 2,917,778 2,730,259

Kraton Polymers, LLC

Chemicals/Plastics Term Loan (Initial) Loan 5.00 1.00 0.00 5.00 1/6/2022 2,500,000 2,286,776 2,533,825

Lannett Company T/L A

Healthcare & Pharmaceuticals Term Loan A Loan 4.75 1.00 0.00 5.75 11/25/2020 1,000,000 970,576 985,000

Lannett Company, Inc.

Healthcare & Pharmaceuticals Term Loan B Loan 5.38 1.00 0.00 6.38 11/25/2022 1,900,000 1,842,852 1,885,750

LEARFIELD COMMUNICATIONS INITIAL T/L (A-L PARENT)

Healthcare & Pharmaceuticals Initial Term Loan (A-L Parent) Loan 3.25 1.00 0.00 4.25 12/1/2023 500,000 497,713 505,625

Lightstone Generation T/L B

Utilities Term Loan B Loan 5.50 1.00 0.00 6.54 1/30/2024 913,043 894,897 925,981

Lightstone Generation T/L C

Utilities Term Loan C Loan 5.50 1.00 0.00 6.54 1/30/2024 86,957 85,236 88,189

Limetree Bay Terminals T/L (01/17)

Oil & Gas Term Loan Loan 5.00 1.00 0.00 6.04 2/15/2024 500,000 495,000 503,125

LPL Holdings

Banking, Finance, Insurance & Real Estate Term Loan B (2022) Loan 4.00 0.75 0.00 4.78 11/21/2022 1,980,000 1,963,355 2,007,225

Mauser Holdings, Inc.

Containers/Glass Products Term Loan Loan 3.50 1.00 0.00 4.50 7/31/2021 488,750 487,123 488,647

McGraw-Hill Global Education Holdings, LLC

Publishing Term Loan Loan 4.00 1.00 0.00 5.00 5/4/2022 995,000 990,840 977,468

Michaels Stores, Inc.

Retailers (Except Food and Drugs) Term Loan B1 Loan 2.75 1.00 0.00 3.75 1/30/2023 1,679,779 1,674,140 1,674,673

Micro Holding Corporation

High Tech Industries Term Loan Loan 3.75 1.00 0.00 4.75 7/8/2021 982,378 978,629 985,079

Microsemi Corporation

Electronics/Electric Term Loan B Loan 2.25 0.00 0.00 3.03 1/17/2023 868,445 845,882 874,593

Midas Intermediate Holdco II, LLC

Automotive Term Loan (Initial) Loan 3.50 1.00 0.00 3.75 8/18/2021 244,375 243,499 246,005

Milacron T/L B

Capital Equipment Term Loan B Loan 3.00 0.00 0.00 3.78 9/28/2023 1,000,000 996,250 1,004,380

Milk Specialties Company

Beverage, Food & Tobacco Term Loan Loan 5.00 1.00 0.00 5.00 8/16/2023 997,500 987,646 1,004,562

Mister Car Wash T/L

Automotive Term Loan Loan 4.25 1.00 0.00 5.25 8/20/2021 831,203 825,179 832,931

MSC Software Corporation

Services: Business Term Loan Loan 4.00 1.00 0.00 5.00 5/29/2020 1,969,898 1,931,995 1,972,360

MWI Holdings, Inc.

Capital Equipment Term Loan (First Lien) Loan 5.50 1.00 0.00 6.50 6/29/2020 2,985,000 2,956,823 3,007,388

National Veterinary Associates, Inc

Healthcare & Pharmaceuticals Term Loan B Loan 3.50 1.00 0.00 4.50 8/14/2021 977,543 974,893 982,430

National Vision, Inc.

Retailers (Except Food and Drugs) Term Loan (Second Lien) Loan 5.75 1.00 0.00 6.75 3/11/2022 250,000 249,793 242,750

New Media Holdings II T/L (NEW)

Retailers (Except Food and Drugs) Term Loan Loan 6.25 1.00 0.00 7.25 6/4/2020 3,168,116 3,154,983 3,140,395

New Millennium Holdco, Inc.

Healthcare & Pharmaceuticals Term Loan Loan 6.50 1.00 0.00 7.50 12/21/2020 1,930,106 1,777,976 980,494

Novetta Solutions

Aerospace and Defense Term Loan (200MM) Loan 5.00 1.00 0.00 6.00 10/16/2022 1,980,000 1,963,361 1,890,900

Novetta Solutions

Aerospace and Defense Term Loan (2nd Lien) Loan 8.50 1.00 0.00 9.50 10/16/2023 1,000,000 991,237 930,000

NPC International, Inc.

Food Services Term Loan (2013) Loan 3.75 1.00 0.00 4.75 12/28/2018 476,250 476,250 477,241

NVA Holdings (National Veterinary) T/L B2

Services: Consumer Term Loan B2 Loan 3.50 1.00 0.00 4.50 8/14/2021 129,601 129,601 130,897

NVA Holdings, Inc.

Services: Consumer Term Loan B1 Loan 3.50 1.00 0.00 4.50 8/14/2021 157,443 157,108 158,034

NXT Capital T/L (11/16)

Banking, Finance, Insurance & Real Estate Term Loan Loan 4.50 1.00 0.00 5.50 11/23/2022 1,000,000 995,240 1,013,750

ON Semiconductor Corporation

High Tech Industries Term Loan B Loan 3.25 0.70 0.00 4.03 3/31/2023 498,750 491,370 503,204

Onex Carestream Finance LP

Healthcare & Pharmaceuticals Term Loan (First Lien 2013) Loan 4.00 1.00 0.00 5.00 6/7/2019 3,613,555 3,606,228 3,490,297

OnexYork Acquisition Co

Healthcare & Pharmaceuticals Term Loan B Loan 3.75 1.00 0.00 4.75 10/1/2021 488,750 486,195 475,554

OpenLink International, LLC

Services: Business Term B Loan Loan 6.50 1.25 0.00 7.75 7/29/2019 2,913,824 2,913,362 2,938,096

P.F. Chang's China Bistro, Inc. (Wok Acquisition Corp.)

Food/Drug Retailers Term Borrowing Loan 3.25 1.00 0.00 4.54 6/24/2019 1,417,598 1,413,680 1,389,245

P2 Upstream Acquisition Co. (P2 Upstream Canada BC ULC)

Services: Business Term Loan (First Lien) Loan 4.00 1.00 0.00 5.25 10/30/2020 970,000 966,928 933,625

Petsmart, Inc. (Argos Merger Sub, Inc.)

Retailers (Except Food and Drugs) Term Loan B1 Loan 3.00 1.00 0.00 4.00 3/11/2022 982,500 977,998 967,183

PGX Holdings, Inc.

Financial Intermediaries Term Loan Loan 5.25 1.00 0.00 6.25 9/29/2020 2,891,464 2,876,188 2,889,671

Planet Fitness Holdings LLC

Leisure Goods/Activities/Movies Term Loan Loan 3.50 0.75 0.00 4.28 3/31/2021 2,392,341 2,385,223 2,407,293

Polycom Term Loan (9/16)

Telecommunications Term Loan Loan 5.25 1.00 0.00 6.25 9/27/2023 1,894,167 1,868,863 1,907,426

PrePaid Legal Services, Inc.

Services: Business Term Loan B Loan 5.25 1.25 0.00 6.50 7/1/2019 3,328,536 3,330,285 3,335,825

Presidio, Inc.

Services: Business Term Loan Loan 3.50 1.00 0.00 4.50 2/2/2022 2,297,698 2,248,964 2,314,930

Prestige Brands T/L B4

Drugs Term Loan B4 Loan 2.75 0.75 0.00 3.53 1/26/2024 500,000 498,779 506,040

Prime Security Services (Protection One)

Services: Business Term Loan Loan 3.25 1.00 0.00 4.25 5/2/2022 1,985,025 1,975,632 2,003,645

Ranpak Holdings, Inc.

Services: Business Term Loan Loan 3.25 1.00 0.00 4.25 10/1/2021 916,047 913,757 918,337

Ranpak Holdings, Inc.

Services: Business Term Loan (Second Lien) Loan 7.25 1.00 0.00 8.25 10/3/2022 500,000 498,149 475,000

Redtop Acquisitions Limited

Electronics/Electric Initial Dollar Term Loan (First Lien) Loan 3.50 1.00 0.00 4.54 12/3/2020 485,019 483,001 486,634

Regal Cinemas Corporation

Services: Consumer Term Loan Loan 2.50 0.75 0.00 3.28 4/1/2022 495,009 493,772 499,573

Research Now Group, Inc

Media Term Loan B Loan 4.50 1.00 0.00 5.50 3/18/2021 2,037,705 2,029,696 2,002,045

Resolute Investment Managers, Inc.

Banking, Finance, Insurance & Real Estate Term Loan Loan 4.25 1.00 0.00 5.25 4/30/2022 240,815 239,883 241,518

Rexnord LLC/RBS Global, Inc.

Industrial Equipment Term B Loan Loan 2.75 1.00 0.00 3.75 8/21/2023 732,374 732,374 736,497

Rexnord LLC/RBS Global, Inc.

Industrial Equipment Term B Loan Loan 2.75 1.00 0.00 3.75 8/21/2023 641,402 641,402 645,013

Reynolds Group Holdings Inc.

Industrial Equipment Incremental U.S. Term Loan Loan 3.00 0.00 0.00 3.78 2/3/2023 1,761,134 1,761,134 1,773,603

Rovi Solutions Corporation / Rovi Guides, Inc.

Electronics/Electric Tranche B-3 Term Loan Loan 2.50 0.75 0.00 3.29 7/2/2021 1,462,500 1,457,765 1,467,984

Royal Adhesives and Sealants

Chemicals/Plastics Term Loan (Second Lien) Loan 7.50 1.00 0.00 8.50 6/19/2023 275,862 274,109 276,552

Royal Holdings T/L (02/17)

Chemicals/Plastics Term Loan (Second Lien) Loan 3.25 1.00 0.00 4.25 6/17/2022 541,607 539,167 544,992

RPI Finance Trust

Financial Intermediaries Term B-4 Term Loan Loan 2.50 0.00 0.00 3.50 10/14/2022 2,554,764 2,554,764 2,580,848

Russell Investment Management T/L B

Banking, Finance, Insurance & Real Estate Term Loan B Loan 5.75 1.00 0.00 6.75 6/1/2023 2,240,000 2,127,043 2,259,600

Sable International Finance Ltd

Telecommunications Term Loan B2 Loan 4.75 0.75 0.00 5.53 12/30/2022 1,500,000 1,470,825 1,521,570

SBP Holdings LP

Industrial Equipment Term Loan (First Lien) Loan 4.00 1.00 0.00 5.00 3/27/2021 972,500 969,442 870,388

Scientific Games International, Inc.

Electronics/Electric Term Loan B2 Loan 4.00 0.75 0.00 4.85 10/1/2021 769,549 762,102 781,416

SCS Holdings (Sirius Computer)

High Tech Industries Term Loan (First Lien) Loan 4.25 1.00 0.00 5.25 10/31/2022 1,972,528 1,934,960 1,991,030

Seadrill Operating LP

Oil & Gas Term Loan B Loan 3.00 1.00 0.00 4.00 2/21/2021 977,330 922,444 729,635

Shearers Foods LLC

Food Services Term Loan (First Lien) Loan 3.94 1.00 0.00 4.94 6/30/2021 977,500 975,832 979,944

Sitel Worldwide

Telecommunications Term Loan Loan 5.50 1.00 0.00 6.56 9/18/2021 1,975,000 1,959,274 1,961,432

SMB Shipping Logistics T/L B (REP WWEX Acquisition)

Transportation Term Loan B Loan 4.50 1.00 0.00 5.53 2/2/2024 1,000,000 995,095 1,008,330

Sonneborn, LLC

Chemicals/Plastics Term Loan (First Lien) Loan 3.75 1.00 0.00 4.75 12/10/2020 207,981 207,633 208,501

Sonneborn, LLC

Chemicals/Plastics Initial US Term Loan Loan 3.75 1.00 0.00 4.75 12/10/2020 1,178,561 1,176,588 1,181,508

Sophia, L.P.

Electronics/Electric Term Loan (Closing Date) Loan 3.25 1.00 0.00 4.25 9/30/2022 1,960,897 1,951,404 1,967,761

SourceHOV LLC

Services: Business Term Loan B (First Lien) Loan 6.75 1.00 0.00 7.75 10/31/2019 1,837,500 1,804,647 1,808,412

SRAM, LLC

Industrial Equipment Term Loan (First Lien) Loan 3.00 1.00 0.00 4.00 4/10/2020 2,725,103 2,719,454 2,718,289

Steak ‘n Shake Operations, Inc.

Food Services Term Loan Loan 3.75 1.00 0.00 4.75 3/19/2021 923,173 917,444 930,097

Survey Sampling International

Services: Business Term Loan B Loan 5.00 1.00 0.00 6.00 12/16/2020 2,721,749 2,707,531 2,721,749

Sybil Finance BV

High Tech Industries Term Loan B Loan 4.00 1.00 0.00 5.00 9/30/2022 987,500 982,957 1,002,006

Syniverse Holdings, Inc.

Telecommunications Initial Term Loan Loan 3.00 1.00 0.00 4.04 4/23/2019 468,977 466,972 427,473

TaxACT, Inc.

Services: Business Term Loan B Loan 6.00 1.00 0.00 7.00 1/3/2023 1,200,000 1,168,727 1,206,000

Tectum Holdings, Inc.

Transportation Delayed Draw Term Loan (Initial) Loan 4.75 1.00 0.00 5.80 8/24/2023 997,500 988,185 1,004,981

Tennessee Merger T/L (Team Health)

Healthcare & Pharmaceuticals Term Loan Loan 2.75 1.00 0.00 3.75 2/6/2024 1,000,000 997,518 996,880

TGI Friday's, Inc.

Food Services Term Loan B Loan 4.25 1.00 0.00 5.25 7/15/2020 1,651,817 1,648,856 1,646,316

Townsquare Media, Inc.

Media Term Loan B Loan 3.00 1.00 0.00 4.00 4/1/2022 932,522 927,933 937,185

TPF II Power LLC and TPF II Covert Midco LLC

Utilities Term Loan B Loan 4.00 1.00 0.00 5.00 10/2/2021 1,413,873 1,364,619 1,426,683

TransDigm, Inc.

Aerospace and Defense Tranche C Term Loan Loan 3.00 0.75 0.00 3.78 2/28/2020 4,233,198 4,238,155 4,249,920

Travel Leaders Group, LLC

Hotel, Gaming and Leisure Term Loan B Loan 5.25 0.00 0.00 6.03 1/25/2024 2,000,000 1,990,095 2,025,000

Trugreen Limited Partnership

Services: Business Term Loan B Loan 5.50 1.00 0.00 6.50 4/13/2023 497,500 490,931 503,719

Twin River Management Group, Inc.

Lodging & Casinos Term Loan B Loan 3.50 1.00 0.00 4.50 7/10/2020 809,438 810,684 819,556

Univar Inc.

Chemicals/Plastics Term B Loan Loan 2.75 0.00 0.00 3.61 7/1/2022 2,962,500 2,948,361 2,971,565

Univision Communications Inc.

Telecommunications Replacement First-Lien Term Loan Loan 3.00 1.00 0.00 4.00 3/1/2020 2,885,666 2,876,319 2,896,949

Valeant Pharmaceuticals International, Inc.

Drugs Series D2 Term Loan B Loan 4.25 0.75 0.00 5.03 2/13/2019 2,445,056 2,437,788 2,456,890

Verint Systems Inc.

Services: Business Term Loan Loan 2.75 0.75 0.00 3.53 9/6/2019 1,006,278 1,003,396 1,010,554

Vistra Operations Company T/L B (12/16)

Utilities Term Loan B Loan 3.25 0.75 0.00 4.02 12/13/2023 500,000 498,784 502,970

Vizient Inc.

Healthcare & Pharmaceuticals Term Loan Loan 4.00 1.00 0.00 5.00 2/13/2023 879,853 856,884 891,405

Vouvray US Finance

Industrial Equipment Term Loan Loan 3.75 1.00 0.00 4.75 6/27/2021 487,500 485,889 486,891

Washington Inventory Service

Services: Business U.S. Term Loan (First Lien) Loan 0.00 0.00 5.75 5.75 12/20/2018 1,735,292 1,743,798 1,418,601

Western Digital Corporation

High Tech Industries Term Loan B (USD) Loan 3.75 0.75 0.00 4.53 5/1/2023 1,592,000 1,547,312 1,602,396

Windstream Services, LLC

Telecommunications Term Loan B6 Loan 4.00 0.75 0.00 4.78 3/29/2021 999,375 989,489 1,006,121

Xerox Business Services T/L B (Conduent)

Services: Business Term Loan Loan 5.50 0.75 0.00 6.28 12/7/2023 750,000 737,850 761,955

Zekelman Industries (JMC Steel) T/L (01/17)

Nonferrous Metals/Minerals Term Loan Loan 3.75 1.00 0.00 4.75 6/14/2021 500,000 501,250 506,040

ZEP, Inc.

Chemicals/Plastics Term Loan B Loan 4.00 1.00 0.00 5.00 6/27/2022 2,955,000 2,941,390 2,984,550

Zest Holdings 1st Lien T/L (2014 Replacement)

Healthcare & Pharmaceuticals Term Loan Loan 4.75 1.00 0.00 5.75 8/17/2020 1,000,000 995,523 1,012,500

$ 297,801,502 $ 292,460,648

Principal Cost Fair Value

Cash and cash equivalents

U.S. Bank Money Market (a)

$ 13,046,555 $ 13,046,555 $ 13,046,555

Total cash and cash equivalents

$ 13,046,555 $ 13,046,555 $ 13,046,555

(a)    Included within cash and cash equivalents in Saratoga CLO's Statements of Assets and Liabilities as of February 28, 2017.

23

Table of Contents

Note 5. Agreements and Related Party Transactions

On July 30, 2010, the Company entered into the Management Agreement with our Manager. The initial term of the Management Agreement was two years, with automatic, one-year renewals at the end of each year, subject to certain approvals by our board of directors and/or the Company's stockholders. On July 11, 2017, our board of directors approved the renewal of the Management Agreement for an additional one-year term. Pursuant to the Management Agreement, our Manager implements our business strategy on a day-to-day basis and performs certain services for us, subject to oversight by our board of directors. Our Manager is responsible for, among other duties, determining investment criteria, sourcing, analyzing and executing investments transactions, asset sales, financings and performing asset management duties. Under the Management Agreement, we have agreed to pay our Manager a management fee for investment advisory and management services consisting of a base management fee and an incentive fee.

The base management fee of 1.75% is calculated based on the average value of our gross assets (other than cash or cash equivalents, but including assets purchased with borrowed funds) at the end of the two most recently completed fiscal quarters.

The incentive fee consists of the following two parts:

The first, payable quarterly in arrears, equals 20.0% of our pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding quarter, that exceeds a 1.875% quarterly hurdle rate measured as of the end of each fiscal quarter, subject to a "catch-up" provision. Under this provision, in any fiscal quarter, our Manager receives no incentive fee unless our pre-incentive fee net investment income exceeds the hurdle rate of 1.875%. Our Manager will receive 100.0% of pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than or equal to 2.344% in any fiscal quarter; and 20.0% of the amount of the our pre-incentive fee net investment income, if any, that exceeds 2.344% in any fiscal quarter. There is no accumulation of amounts on the hurdle rate from quarter to quarter, and accordingly there is no claw back of amounts previously paid if subsequent quarters are below the quarterly hurdle rate, and there is no delay of payment if prior quarters are below the quarterly hurdle rate.

The second part of the incentive fee is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Management Agreement) and equals 20.0% of our "incentive fee capital gains," which equals our realized capital gains on a cumulative basis from May 31, 2010 through the end of the fiscal year, if any, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fee. Importantly, the capital gains portion of the incentive fee is based on realized gains and realized and unrealized losses from May 31, 2010. Therefore, realized and unrealized losses incurred prior to such time will not be taken into account when calculating the capital gains portion of the incentive fee, and our Manager will be entitled to 20.0% of incentive fee capital gains that arise after May 31, 2010. In addition, for the purpose of the "incentive fee capital gains" calculations, the cost basis for computing realized gains and losses on investments held by us as of May 31, 2010 will equal the fair value of such investments as of such date.

For the three months ended August 31, 2017 and August 31, 2016, the Company incurred $1.5 million and $1.2 million in base management fees, respectively. For the three months ended August 31, 2017 and August 31, 2016, the Company incurred $0.9 million and $0.8 million in incentive fees related to pre-incentive fee net investment income, respectively. For the three months ended August 31, 2017 and August 31, 2016, the Company accrued $0.8 million and $0.4 million in incentive fees related to capital gains, respectively. For the six months ended August 31, 2017 and August 31, 2016, the Company incurred $2.9 million and $2.4 million in base management fees, respectively. For the six months ended August 31, 2017 and August 31, 2016, the Company incurred $1.7 million and $1.4 million in incentive fees related to pre-incentive fee net investment income, respectively. For the six months ended August 31, 2017 and August 31, 2016, the Company accrued $0.2 million and $0.5 million in incentive fees related to capital gains, respectively. The accrual is calculated using both realized and unrealized capital gains for the period. The actual incentive fee related to capital gains will be determined and payable in arrears at the end of the fiscal year and will include only realized capital gains for the period. As of August 31, 2017, the base management fees accrual was $1.5 million and the incentive fees accrual was $3.6 million and is included in base management and incentive fees payable in the accompanying consolidated statements of assets and liabilities. As of February 28, 2017, the base management fees accrual was $1.2 million and the incentive fees accrual was $4.6 million and is included in base management and incentive fees payable in the accompanying consolidated statements of assets and liabilities.

On July 30, 2010, the Company entered into a separate administration agreement (the "Administration Agreement") with our Manager, pursuant to which our Manager, as our administrator, has agreed to furnish us with the facilities and administrative services necessary to conduct our day-to-day operations and provide managerial assistance on our behalf to those portfolio companies to which we are required to provide such assistance. The initial term of the Administration Agreement was two years, with automatic, one-year renewals at the end of each year subject to certain approvals by our board of directors and/or our stockholders. The amount of expenses payable or reimbursable thereunder by the Company was capped at $1.0 million for the initial two year term of the Administration Agreement and subsequent renewals. On July 8, 2015, our board of directors approved the renewal of the

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Administration Agreement for an additional one-year term and determined to increase the cap on the payment or reimbursement of expenses by the Company thereunder, which had not been increased since the inception of the agreement, to $1.3 million. On October 5, 2016, our board of directors determined to increase the cap on the payment or reimbursement of expenses by the Company under the Administration Agreement, from $1.3 million to $1.5 million, effective November 1, 2016. On July 11, 2017, our board of directors approved the renewal of the Administration Agreement for an additional one-year term, and determined to increase the cap on the payment or reimbursement of expenses by the Company from $1.5 million to $1.75 million, effective August 1, 2017.

For the three months ended August 31, 2017 and August 31, 2016, we recognized $0.4 million and $0.3 million in administrator expenses, respectively, pertaining to bookkeeping, record keeping and other administrative services provided to us in addition to our allocable portion of rent and other overhead related expenses. For the six months ended August 31, 2017 and August 31, 2016, we recognized $0.8 million and $0.7 million in administrator expenses, respectively, pertaining to bookkeeping, record keeping and other administrative services provided to us in addition to our allocable portion of rent and other overhead related expenses. As of August 31, 2017, $0.4 million of administrator expenses were accrued and included in due to manager in the accompanying consolidated statements of assets and liabilities. As of February 28, 2017, $0.4 million of administrator expenses were accrued and included in due to manager in the accompanying consolidated statements of assets and liabilities. For the six months ended August 31, 2017 and August 31, 2016, the Company neither bought nor sold any investments from the Saratoga CLO.

Note 6. Borrowings

Credit Facility

As a BDC, we are only allowed to employ leverage to the extent that our asset coverage, as defined in the 1940 Act, equals at least 200.0% after giving effect to such leverage. The amount of leverage that we employ at any time depends on our assessment of the market and other factors at the time of any proposed borrowing. Our asset coverage ratio, as defined in the 1940 Act, was 258.0% as of August 31, 2017 and 271.0% as of February 28, 2017.

On April 11, 2007, we entered into a $100.0 million revolving securitized credit facility (the "Revolving Facility"). On May 1, 2007, we entered into a $25.7 million term securitized credit facility (the "Term Facility" and, together with the Revolving Facility, the "Facilities"), which was fully drawn at closing. In December 2007, we consolidated the Facilities by using a draw under the Revolving Facility to repay the Term Facility. In response to the market wide decline in financial asset prices, which negatively affected the value of our portfolio, we terminated the revolving period of the Revolving Facility effective January 14, 2009 and commenced a two-year amortization period during which all principal proceeds from the collateral were used to repay outstanding borrowings. A significant percentage of our total assets had been pledged under the Revolving Facility to secure our obligations thereunder. Under the Revolving Facility, funds were borrowed from or through certain lenders and interest was payable monthly at the greater of the commercial paper rate and our lender's prime rate plus 4.00% plus a default rate of 2.00% or, if the commercial paper market was unavailable, the greater of the prevailing LIBOR rates and our lender's prime rate plus 6.00% plus a default rate of 3.00%.

On July 30, 2010, we used the net proceeds from (i) the stock purchase transaction and (ii) a portion of the funds available to us under the $45.0 million senior secured revolving credit facility (the "Credit Facility") with Madison Capital Funding LLC, in each case, to pay the full amount of principal and accrued interest, including default interest, outstanding under the Revolving Facility. As a result, the Revolving Facility was terminated in connection therewith. Substantially all of our total assets, other than those held by SBIC LP, have been pledged under the Credit Facility to secure our obligations thereunder.

On February 24, 2012, we amended our senior secured revolving credit facility with Madison Capital Funding LLC to, among other things:

expand the borrowing capacity under the Credit Facility from $40.0 million to $45.0 million;

extend the period during which we may make and repay borrowings under the Credit Facility from July 30, 2013 to February 24, 2015 (the "Revolving Period"). The Revolving Period may, upon the occurrence of an event of default, by action of the lenders or automatically, be terminated. All borrowings and other amounts payable under the Credit Facility are due and payable five years after the end of the Revolving Period; and

remove the condition that we may not acquire additional loan assets without the prior written consent of Madison Capital Funding LLC.

On September 17, 2014, we entered into a second amendment to the Credit Facility with Madison Capital Funding LLC to, among other things:

extend the commitment termination date from February 24, 2015 to September 17, 2017;

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extend the maturity date of the Credit Facility from February 24, 2020 to September 17, 2022 (unless terminated sooner upon certain events);

reduce the applicable margin rate on base rate borrowings from 4.50% to 3.75%, and on LIBOR borrowings from 5.50% to 4.75%; and

reduce the floor on base rate borrowings from 3.00% to 2.25%; and on LIBOR borrowings from 2.00% to 1.25%.

On May 18, 2017, we entered into a third amendment to the Credit Facility with Madison Capital Funding LLC to, among other things:

extend the commitment termination date from September 17, 2017 to September 17, 2020;

extend the final maturity date of the Credit Facility from September 17, 2022 to September 17, 2025 (unless terminated sooner upon certain events);

reduce the floor on base rate borrowings from 2.25% to 2.0%;

reduce the floor on LIBOR borrowings from 1.25% to 1.00%; and

reduce the commitment fee rate from 0.75% to 0.50% for any period during which the ratio of advances outstanding to aggregate commitments, expressed as a percentage, is greater than or equal to 50%.

As of August 31, 2017 and February 28, 2017, there was $10.0 million and $0.0, respectively, of outstanding borrowings under the Credit Facility and the Company was in compliance with all of the limitations and requirements of the Credit Facility. Financing costs of $3.1 million related to the Credit Facility have been capitalized and are being amortized over the term of the facility. For the three months ended August 31, 2017 and August 31, 2016, we recorded $0.4 million and $0.1 million of interest expense, respectively. For the six months ended August 31, 2017 and August 31, 2016, we recorded $0.5 million and $0.2 million of interest expense, respectively. For the three months ended August 31, 2017 and August 31, 2016, we recorded $0.02 million and $0.02 million of amortization of deferred financing costs related to the Credit Facility and Revolving Facility, respectively. For the six months ended August 31, 2017 and August 31, 2016, we recorded $0.04 million and $0.04 million of amortization of deferred financing costs related to the Credit Facility and Revolving Facility, respectively. The weighted average interest rates during the three and six months ended August 31, 2017 on the outstanding borrowings under the Credit Facility were 5.92% and 5.94%, respectively. During the three and six months ended August 31, 2017, the average dollar amount of outstanding borrowings under the Credit Facility was $21.3 million and $10.9 million, respectively. During the three and six months ended August 31, 2016, there were no outstanding borrowings under the Credit Facility.

The Credit Facility contains limitations as to how borrowed funds may be used, such as restrictions on industry concentrations, asset size, weighted average life, currency denomination and collateral interests. The Credit Facility also includes certain requirements relating to portfolio performance, the violation of which could result in the limit of further advances and, in some cases, result in an event of default, allowing the lenders to accelerate repayment of amounts owed thereunder. The Credit Facility has an eight year term, consisting of a three year period (the "Revolving Period"), under which the Company may make and repay borrowings, and a final maturity five years from the end of the Revolving Period. Availability on the Credit Facility will be subject to a borrowing base calculation, based on, among other things, applicable advance rates (which vary from 50.0% to 75.0% of par or fair value depending on the type of loan asset) and the value of certain "eligible" loan assets included as part of the Borrowing Base. Funds may be borrowed at the greater of the prevailing LIBOR rate and 1.00%, plus an applicable margin of 4.75%. At the Company's option, funds may be borrowed based on an alternative base rate, which in no event will be less than 2.00%, and the applicable margin over such alternative base rate is 3.75%. In addition, the Company will 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 Credit Facility for the duration of the Revolving Period.

Our borrowing base under the Credit Facility was $34.0 million subject to the Credit Facility cap of $45.0 million at August 31, 2017. For purposes of determining the borrowing base, most assets are assigned the values set forth in our most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q filed with the SEC. Accordingly, the August 31, 2017 borrowing base relies upon the valuations set forth in the Quarterly Report on Form 10-Q for the period ended May 31, 2017, as filed with the SEC on July 12, 2017. The valuations presented in this Quarterly Report on Form 10-Q will not be incorporated into the borrowing base until after this Quarterly Report on Form 10-Q is filed with the SEC.

SBA Debentures

SBIC LP is able to borrow funds from the SBA against regulatory capital (which approximates equity capital) that is paid in and is subject to customary regulatory requirements including but not limited to an examination by the SBA. As of August 31, 2017, we have funded SBIC LP with $75.0 million of equity capital, and have $134.7 million of SBA-guaranteed debentures outstanding. SBA debentures are non-recourse to us, have a 10-year maturity, and may be prepaid at any time without penalty. The interest rate of SBA debentures is fixed at the time of issuance, often referred to as pooling, at a market-driven spread over 10-year U.S. Treasury Notes. SBA current regulations limit the amount that SBIC LP may borrow to a maximum of $150.0 million, which is up to twice its potential regulatory capital.

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SBICs are designed 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. Under present SBA regulations, eligible small businesses include businesses that have a tangible net worth not exceeding $19.5 million and have average annual fully taxed net income not exceeding $6.5 million for the two most recent fiscal years. In addition, an SBIC must devote 25.0% of its investment activity to ‘‘smaller'' concerns as defined by the SBA. A smaller concern is one that has a tangible net worth not exceeding $6.0 million and has average annual fully taxed net income not exceeding $2.0 million for the two most recent fiscal years. SBA regulations also provide alternative size standard criteria to determine eligibility, which depend on the industry in which the business is engaged and are based on such factors as the number of employees and gross sales. According to SBA regulations, SBICs may make long-term loans to small businesses, invest in the equity securities of such businesses and provide them with consulting and advisory services.

SBIC LP is subject to regulation and oversight by the SBA, including requirements with respect to maintaining certain minimum financial ratios and other covenants. Receipt of an SBIC license does not assure that SBIC LP will receive SBA-guaranteed debenture funding, which is dependent upon SBIC LP continuing to be in compliance with SBA regulations and policies. The SBA, as a creditor, will have a superior claim to SBIC LP's assets over our stockholders and debtholders in the event we liquidate SBIC LP or the SBA exercises its remedies under the SBA-guaranteed debentures issued by SBIC LP upon an event of default.

The Company received exemptive relief from the SEC to permit it to exclude the debt of SBIC LP guaranteed by the SBA from the definition of senior securities in the 200.0% asset coverage test under the 1940 Act. This allows the Company increased flexibility under the 200.0% asset coverage test by permitting it to borrow up to $150.0 million more than it would otherwise be able to absent the receipt of this exemptive relief.

As of August 31, 2017 and February 28, 2017, there was $134.7 million and $112.7 million outstanding of SBA debentures, respectively. The carrying amount of the amount outstanding of SBA debentures approximates its fair value, which is based on a waterfall analysis showing adequate collateral coverage, $4.6 million, of financing costs related to the SBA debentures, have been capitalized and are being amortized over the term of the commitment and drawdown.

For the three months ended August 31, 2017 and August 31, 2016, we recorded $1.0 million and $0.8 million of interest expense related to the SBA debentures, respectively. For the three months ended August 31, 2017 and August 31, 2016, we recorded $0.1 million and $0.1 million of amortization of deferred financing costs related to the SBA debentures, respectively. The weighted average interest rate during the three months ended August 31, 2017 and August 31, 2016 on the outstanding borrowings of the SBA debentures was 3.06% and 3.19%, respectively. For the six months ended August 31, 2017 and August 31, 2016, we recorded $2.0 million and $1.7 million of interest expense related to the SBA debentures, respectively. For the six months ended August 31, 2017 and August 31, 2016, we recorded $0.2 million and $0.3 million of amortization of deferred financing costs related to the SBA debentures, respectively. The weighted average interest rate during the six months ended August 31, 2017 and August 31, 2016 on the outstanding borrowings of the SBA debentures was 3.11% and 3.14%, respectively. During the three and six months ended August 31, 2017, the average dollar amount of SBA debentures outstanding was $134.7 million and $124.4 million, respectively. During the three and six months ended August 31, 2016, the average dollar amount of SBA debentures outstanding was $103.7 million.

In December 2015, the 2016 omnibus spending bill approved by Congress and signed into law by the President increased the amount of SBA-guaranteed debentures that affiliated SBIC funds can have outstanding from $225.0 million to $350.0 million, subject to SBA approval. SBA regulations currently limit the amount of SBA-guaranteed debentures that an SBIC may issue to $150.0 million when it has at least $75.0 million in regulatory capital. Affiliated SBICs are permitted to issue up to a combined maximum amount of $350.0 million in SBA-guaranteed debentures when they have at least $175.0 million in combined regulatory capital.

On April 2, 2015, the SBA issued a "green light" letter inviting the Company to continue the application process to obtain a license to form and operate its second SBIC subsidiary. On September 27, 2016, the SBA informed us that as part of their continued review of our application for a second license, and in order to ensure that they were reviewing the most current information available, we would need to update all previously submitted materials and invited us to reapply. As a result of this request, with which we are in the process of complying, the existing "green light" letter that the SBA issued to us has expired. If approved in the future, a second SBIC license would provide us an incremental source of long-term capital by permitting us to issue up to $150.0 million of additional SBA-guaranteed debentures in addition to the $150.0 million already approved under the first license.

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Notes

On May 10, 2013, the Company issued $42.0 million in aggregate principal amount of 7.50% fixed-rate notes due 2020 (the "2020 Notes"). The 2020 Notes will mature on May 31, 2020, and since May 31, 2016, may be redeemed in whole or in part at any time or from time to time at the Company's option. Interest will be payable quarterly beginning August 15, 2013.

On May 17, 2013, the Company closed an additional $6.3 million in aggregate principal amount of the 2020 Notes, pursuant to the full exercise of the underwriters' option to purchase additional 2020 Notes. On May 29, 2015, the Company entered into a Debt Distribution Agreement with Ladenburg Thalmann & Co. through which the Company may offer for sale, from time to time, up to $20.0 million in aggregate principal amount of the 2020 Notes through an At-the-Market ("ATM") offering. As of August 31, 2017, the Company sold 539,725 bonds with a principal of $13,493,125 at an average price of $25.31 for aggregate net proceeds of $13,385,766 (net of transaction costs).

On December 21, 2016, the Company issued $74.5 million in aggregate principal amount of our 6.75% fixed-rate notes due 2023 (the "2023 Notes") for net proceeds of $71.7 million after deducting underwriting commissions of approximately $2.3 million and offering costs of approximately $0.5 million. The issuance included the exercise of substantially all of the underwriters' option to purchase an additional $9.8 million aggregate principal amount of 2023 Notes within 30 days. Interest on the 2023 Notes is paid quarterly in arrears on March 15, June 15, September 15 and December 15, at a rate of 6.75% per year, beginning March 30, 2017. The 2023 Notes mature on December 30, 2023, and commencing December 21, 2019, 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 to repay all of the outstanding indebtedness under the 2020 Notes, which amounted to $61.8 million, and for general corporate purposes in accordance with our investment objective and strategies. The 2023 Notes are listed on the NYSE under the trading symbol "SAB" with a par value of $25.00 per share. The remaining unamortized deferred debt financing costs of $1.5 million (including underwriting commissions and net of issuance premiums), was recorded within loss on debt extinguishment in the consolidated statements of operations in the fourth quarter of the fiscal year ended February 28, 2017, when the related 2020 Notes were extinguished. As of August 31, 2017, $2.8 million of financing costs related to the 2023 Notes have been capitalized and are being amortized over the term of the 2023 Notes.

As of August 31, 2017, the carrying amount and fair value of the 2023 Notes was $74.5 million and $77.9 million, respectively. The fair value of the 2023 Notes, which are publicly traded, is based upon closing market quotes as of the measurement date and would be classified as a Level 1 liability within the fair value hierarchy. For the three and six months ended August 31, 2017, we recorded $1.3 million and $2.5 million, respectively, of interest expense and $0.1 million and $0.2 million, respectively, of amortization of deferred financing costs related to the 2023 Notes. As of February 28, 2017, the carrying amount and fair value of the 2023 Notes was $74.5 million and $77.1 million, respectively. For the three and six months ended August 31, 2016, we recorded $1.2 million and $2.3 million, respectively, of interest expense and $0.1 million and $0.2 million, respectively, of amortization of deferred financing costs related to the 2020 Notes. During the three and six months ended August 31, 2017, the average dollar amount of 2023 Notes outstanding was $74.5 million. During the three and six months ended August 31, 2016, the average dollar amount of 2020 Notes outstanding was $61.8 million.

Note 7. Commitments and contingencies

Contractual obligations

The following table shows our payment obligations for repayment of debt and other contractual obligations at August 31, 2017:

Payment Due by Period
Total Less Than
1 Year
1 - 3
Years
3 - 5
Years
More Than
5 Years
($ in thousands)

Long-Term Debt Obligations

$ 219,111 $ -   $ -   $ -   $ 219,111

Off-balance sheet arrangements

The Company's off-balance sheet arrangements consisted of $5.0 million and $2.0 million of unfunded commitments to provide debt financing to its portfolio companies or to fund limited partnership interests as of August 31, 2017 and February 28, 2017, respectively. Such commitments are generally up to the Company's 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 the Company's consolidated statements of assets and liabilities and are not reflected in the Company's consolidated statements of assets and liabilities.

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A summary of the composition of the unfunded commitments as of August 31, 2017 and February 28, 2017 is shown in the table below (dollars in thousands):

As of
August 31, 2017 February 28, 2017

CLEO Communications Holding, LLC

$ 3,000 $ -  

GreyHeller LLC

2,000 2,000

Total

$ 5,000 $ 2,000

Note 8. Directors Fees

The independent directors receive an annual fee of $40,000. They also receive $2,500 plus reimbursement of reasonable out-of- pocket expenses incurred in connection with attending each board meeting and receive $1,000 plus reimbursement of reasonable out-of- pocket expenses incurred in connection with attending each committee meeting. In addition, the chairman of the Audit Committee receives an annual fee of $5,000 and the chairman of each other committee receives an annual fee of $2,000 for their additional services in these capacities. In addition, we have purchased directors' and officers' liability insurance on behalf of our directors and officers. Independent directors have the option to receive their directors' fees in the form of our common stock issued at a price per share equal to the greater of net asset value or the market price at the time of payment. No compensation is paid to directors who are "interested persons" of the Company (as such term is defined in the 1940 Act). For the three months ended August 31, 2017 and August 31, 2016, we incurred $0.06 million and $0.06 million for directors' fees and expenses, respectively. For the six months ended August 31, 2017 and August 31, 2016, we incurred $0.1 million and $0.1 million for directors' fees and expenses, respectively. As of August 31, 2017 and February 28, 2017, $0.06 million and $0.05 million in directors' fees and expenses were accrued and unpaid, respectively. As of August 31, 2017, we had not issued any common stock to our directors as compensation for their services.

Note 9. Stockholders' Equity

On May 16, 2006, GSC Group, Inc. capitalized the LLC, by contributing $1,000 in exchange for 67 shares, constituting all of the issued and outstanding shares of the LLC.

On March 20, 2007, the Company issued 95,995.5 and 8,136.2 shares of common stock, priced at $150.00 per share, to GSC Group and certain individual employees of GSC Group, respectively, in exchange for the general partnership interest and a limited partnership interest in GSC Partners CDO III GP, LP, collectively valued at $15.6 million. At this time, the 6.7 shares owned by GSC Group in the LLC were exchanged for 6.7 shares of the Company.

On March 28, 2007, the Company completed its IPO of 725,000 shares of common stock, priced at $150.00 per share, before underwriting discounts and commissions. Total proceeds received from the IPO, net of $7.1 million in underwriter's discount and commissions, and $1.0 million in offering costs, were $100.7 million.

On November 13, 2009, we declared a dividend of $18.25 per share payable on December 31, 2009. Shareholders had the option to receive payment of the dividend in cash, shares of common stock, or a combination of cash and shares of common stock, provided that the aggregate cash payable to all shareholders was limited to $2.1 million or $2.50 per share. Based on shareholder elections, the dividend consisted of $2.1 million in cash and 864,872.5 of newly issued shares of common stock.

On July 30, 2010, our Manager and its affiliates purchased 986,842 shares of common stock at $15.20 per share. Total proceeds received from this sale were $15.0 million.

On August 12, 2010, we effected a one-for-ten reverse stock split of our outstanding common stock. As a result of the reverse stock split, every ten shares of our common stock were converted into one share of our common stock. Any fractional shares received as a result of the reverse stock split were redeemed for cash. The total cash payment in lieu of shares was $230. Immediately after the reverse stock split, we had 2,680,842 shares of our common stock outstanding.

On November 12, 2010, we declared a dividend of $4.40 per share payable on December 29, 2010. Shareholders had the option to receive payment of the dividend in cash, shares of common stock, or a combination of cash and shares of common stock, provided that the aggregate cash payable to all shareholders was limited to approximately $1.2 million or $0.44 per share. Based on shareholder elections, the dividend consisted of approximately $1.2 million in cash and 596,235 shares of common stock.

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On November 15, 2011, we declared a dividend of $3.00 per share payable on December 30, 2011. Shareholders had the option to receive payment of the dividend in cash, shares of common stock, or a combination of cash and shares of common stock, provided that the aggregate cash payable to all shareholders was limited to approximately $2.0 million or $0.60 per share. Based on shareholder elections, the dividend consisted of approximately $2.0 million in cash and 599,584 shares of common stock.

On November 9, 2012, the Company declared a dividend of $4.25 per share payable on December 31, 2012. Shareholders had the option to receive payment of the dividend in cash, shares of common stock, or a combination of cash and shares of common stock, provided that the aggregate cash payable to all shareholders was limited to approximately $3.3 million or $0.85 per share. Based on shareholder elections, the dividend consisted of approximately $3.3 million in cash and 853,455 shares of common stock.

On October 30, 2013, the Company declared a dividend of $2.65 per share payable on December 27, 2013. Shareholders had the option to receive payment of the dividend in cash, shares of common stock, or a combination of cash and shares of common stock, provided that the aggregate cash payable to all shareholders was limited to approximately $2.5 million or $0.53 per share. Based on shareholder elections, the dividend consisted of approximately $2.5 million in cash and 649,500 shares of common stock.

On September 24, 2014, the Company declared a dividend of $0.18 per share payable on November 28, 2014. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock pursuant to the Company's DRIP. Based on shareholder elections, the dividend consisted of approximately $0.6 million in cash and 22,283 newly issued shares of common stock.

On September 24, 2014, the Company declared a dividend of $0.22 per share payable on February 27, 2015. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $0.8 million in cash and 26,858 newly issued shares of common stock.

On April 9, 2015, the Company declared a dividend of $0.27 per share payable on May 29, 2015. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $0.9 million in cash and 33,766 newly issued shares of common stock.

On May 14, 2015, the Company declared a special dividend of $1.00 per share payable on June 5, 2015. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $3.4 million in cash and 126,230 newly issued shares of common stock.

On July 8, 2015, the Company declared a dividend of $0.33 per share payable on August 31, 2015. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $1.1 million in cash and 47,861 newly issued shares of common stock.

On October 7, 2015, the Company declared a dividend of $0.36 per share payable on November 30, 2015. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $1.1 million in cash and 61,029 newly issued shares of common stock.

On January 12, 2016, the Company declared a dividend of $0.40 per share payable on February 29, 2016. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $1.4 million in cash and 66,765 newly issued shares of common stock.

On March 31, 2016, the Company declared a dividend of $0.41 per share payable on April 27, 2016. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $1.5 million in cash and 56,728 newly issued shares of common stock.

On July 7, 2016, the Company declared a dividend of $0.43 per share payable on August 9, 2016. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $1.5 million in cash and 58,167 newly issued shares of common stock.

On August 8, 2016, the Company declared a special dividend of $0.20 per share payable on September 5, 2016. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $0.7 million in cash and 24,786 newly issued shares of common stock.

On October 5, 2016, the Company declared a dividend of $0.44 per share payable on November 9, 2016. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $1.5 million in cash and 58,548 newly issued shares of common stock.

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On January 12, 2017, the Company declared a dividend of $0.45 per share payable on February 9, 2017. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $1.6 million in cash and 50,453 newly issued shares of common stock.

On February 28, 2017, the Company declared a dividend of $0.46 per share payable on March 28, 2017. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $2.0 million in cash and 29,096 newly issued shares of common stock.

On May 30, 2017, the Company declared a dividend of $0.47 per share payable on June 27, 2017. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $2.3 million in cash and 26,222 newly issued shares of common stock.

On August 28, 2017, the Company declared a dividend of $0.48 per share payable on September 26, 2017. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant our DRIP. Based on shareholder elections, the dividend consisted of approximately $2.2 million in cash and 33,551 newly issued shares of common stock.

On September 24, 2014, the Company announced the approval of an open market share repurchase plan that allowed it to repurchase up to 200,000 shares of its common stock at prices below its NAV as reported in its then most recently published consolidated financial statements. On October 7, 2015, the Company's board of directors extended the open market share repurchase plan for another year and increased the number of shares the Company is permitted to repurchase at prices below its NAV, as reported in its then most recently published consolidated financial statements, to 400,000 shares of its common stock. On October 5, 2016, the Company's board of directors extended the open market share repurchase plan for another year to October 15, 2017 and increased the number of shares the Company is permitted to repurchase at prices below its NAV, as reported in its then most recently published consolidated financial statements, to 600,000 shares of its common stock. On October 10, 2017, the Company's board of directors extended the open market share repurchase plan for another year to October 15, 2018, leaving the number of shares unchanged at 600,000 shares of its common stock. As of August 31, 2017, the Company purchased 218,491 shares of common stock, at the average price of $16.87 for approximately $3.7 million pursuant to this repurchase plan.

On March 16, 2017, we entered into an equity distribution agreement with Ladenburg Thalmann & Co. Inc., through which we may offer for sale, from time to time, up to $30.0 million of our common stock through an ATM offering. As of August 31, 2017, the Company sold 117,354 shares for gross proceeds of $2.6 million at an average price of $22.49 for aggregate net proceeds of $2.6 million (net of transaction costs).

Note 10. Summarized Financial Information of Our Unconsolidated Subsidiary

In accordance with SEC Regulation S-X Rules 3-09 and 4-08(g), the Company must determine which of its unconsolidated controlled portfolio companies, if any, are considered "significant subsidiaries." After performing this analysis, the Company determined that one of its portfolio companies, Easy Ice, LLC ("Easy Ice") is not a significant subsidiary for the three months ended August 31, 2017 under at least one of the significance conditions of Rule 4-08(g) of SEC Regulation S-X, but was a significant subsidiary for the year ended February 28, 2017. Accordingly, audited financial information for the year ended December 31, 2016 and as of December 31, 2016 has been included as follows (in thousands):

As of
Balance Sheet – Easy Ice, LLC December 31, 2016

Current assets

$ 1,058

Noncurrent assets

$ 18,245

Current liabilities

$ 3,473

Noncurrent liabilities

$ 23,113

Total deficit

$ (7,283

For the year ended
Statements of Operations – Easy Ice, LLC December 31, 2016

Rental income

$ 14,463

Rental expenses

$ 8,463

Gross margin

$ 6,000

Operating expenses

$ 5,123

Income from operations

$ 877

Net loss

$ (1,356

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Note 11. Earnings Per Share

In accordance with the provisions of FASB ASC 260, " Earnings per Share " ("ASC 260"), basic earnings per share is computed by dividing earnings available to common shareholders by the weighted average number of shares outstanding during the period. Other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis.

The following information sets forth the computation of the weighted average basic and diluted net increase in net assets per share from operations for the three and six months ended August 31, 2017 and August 31, 2016 (dollars in thousands except share and per share amounts):

For the three months ended For the six months ended

Basic and diluted

August 31,
2017
August 31,
2016
August 31,
2017
August 31,
2016

Net increase in net assets from operations

$ 6,870 $ 5,272 $ 7,884 $ 8,559

Weighted average common shares outstanding

5,955,251 5,740,816 5,908,453 5,739,157

Weighted average earnings per common share

$ 1.15 $ 0.92 $ 1.33 $ 1.49

Note 12. Dividend

On May 30, 2017, the Company declared a dividend of $0.47 per share which was paid on June 27, 2017, to common stockholders of record as of June 15, 2017. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant to our DRIP.

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 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.

On February 28, 2017, the Company declared a dividend of $0.46 per share which was paid on March 28, 2017, to common stockholders of record as of March 15, 2017. Shareholders had the option to receive payment of the dividend in cash, or receive shares of common stock, pursuant to our DRIP.

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 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.

The following table summarizes dividends declared for the six months ended August 31, 2017 (dollars in thousands except per share amounts):

Date Declared

Record Date Payment Date Amount
Per Share*
Total
Amount

May 30, 2017

June 15, 2017 June 27, 2017 $ 0.47 $ 2,792

February 28, 2017

March 15, 2017 March 28, 2017 $ 0.46 $ 2,666

Total dividends declared

$ 0.93 $ 5,458

* Amount per share is calculated based on the number of shares outstanding at the date of declaration.

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The following table summarizes dividends declared for the six months ended August 31, 2016 (dollars in thousands except per share amounts):

Date Declared

Record Date Payment Date Amount
Per Share*
Total
Amount

August 8, 2016

August 24, 2016 September 5, 2016 $ 0.20 $ 1,151

July 7, 2016

July 29, 2016 August 9, 2016 $ 0.43 $ 2,466

March 31, 2016

April 15, 2016 April 27, 2016 $ 0.41 $ 2,346

Total dividends declared

$ 1.04 $ 5,963

* Amount per share is calculated based on the number of shares outstanding at the date of declaration.

Note 13. Financial Highlights

The following is a schedule of financial highlights for the six months ended August 31, 2017 and August 31, 2016:

August 31, 2017 August 31, 2016

Per share data:

Net asset value at beginning of period

$ 21.97 $ 22.06

Net investment income(1)

1.08 0.90

Net realized and unrealized gains and losses on investments

0.25 0.59

Net increase in net assets from operations

1.33 1.49

Distributions declared from net investment income

(0.93 (1.04