SARATOGA INVESTMENT CORP.

Previous wording

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

Current wording

We are a Maryland corporation that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the “1940 Act”). Our investment objective is to create attractive risk-adjusted returns by generating current income and long-term capital appreciation from our investments. We invest primarily in senior and unitranche leveraged loans and mezzanine debt issued by private U.S. middle-market companies, which we define as companies having earnings before interest, tax, depreciation and amortization (“EBITDA”) of between $2 million and $50 million, both through direct lending and through participation in loan syndicates. We may also invest up to 30.0% of the portfolio in opportunistic investments in order to seek to enhance returns to stockholders. Such investments may include investments in distressed debt, which may include securities of companies in bankruptcy, foreign debt, private equity, securities of public companies that are not thinly traded and structured finance vehicles such as collateralized loan obligation funds. Although we have no current intention to do so, we may invest in private equity funds in the future. Private equity funds are not limited in how they invest their assets, and the underlying investments held by private equity funds may impact our strategies, risks, and costs. Shareholders may have limited information about the underlying investments of the private equity funds in which we invest, including with respect to such funds’ holdings, liquidity, and valuation We have elected, and intend to qualify annually, to be treated for U.S. federal income tax purposes as a RIC under subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

Previous wording

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

Current wording

Our wholly owned subsidiaries, Saratoga Investment Corp. SBIC II LP (“SBIC II LP”) and Saratoga Investment Corp. SBIC III LP (“SBIC III LP”, and together with SBIC II LP, the “SBIC Subsidiaries”), received SBIC licenses from the SBA on August 14, 2019 and September 29, 2022, respectively. Each of the SBIC Subsidiaries provides up to $175.0 million in long-term capital in the form of debentures guaranteed by the SBA. Our wholly owned subsidiary, SBIC LP’s (“SBIC LP”), repaid its outstanding debentures and subsequently surrendered its license to the SBA on January 3, 2024, providing the Company access to all undistributed capital of SBIC LP, and SBIC LP subsequently merged with and into the Company. In May 2026, legislation amending the Small Business Investment Act of 1958 increased (a) the individual leverage limit from $175.0 million to $250.0 million, subject to SBA approvals, and (b) the maximum leverage available for two or more SBICs under common control from $350.0 million to $475.0 million.

Previous wording

We and TJHA have committed to provide up to a combined $50.0 million of financing to SLF JV through cash contributions, where we provided $43.75 million and TJHA provided $6.25 million, resulting in an 87.5% and 12.5% ownership between the two parties. The financing is issued in the form of an unsecured note and equity. The unsecured note will pay a fixed-rate of 10.0% per annum and is due and payable in full on October 20, 2033. As of November 30, 2025, our and TJHA’s investment in SLF JV consisted of an unsecured note of $17.6 million and $2.5 million, respectively; and membership interest of $17.6 million and $2.5 million, respectively. As of February 28, 2025, our and TJHA’s investment in SLF JV consisted of an unsecured note of $17.6 million and $2.5 million, respectively; and membership interest of $17.6 million and $2.5 million, respectively. As of November 30, 2025 and February 28, 2025, our investment in the unsecured note of SLF JV had a fair value of $16.2 million and $16.5 million, respectively, and our investment in the membership interests of SLF JV had a fair value of $6.6 million and $3.1 million, respectively.

Current wording

We and TJHA have committed to provide up to a combined $50.0 million of financing to SLF JV through cash contributions, where we provided $43.75 million and TJHA provided $6.25 million, resulting in an 87.5% and 12.5% ownership between the two parties. The financing is issued in the form of an unsecured note and equity. The unsecured note will pay a fixed-rate of 10.0% per annum and is due and payable in full on October 20, 2033. As of May 31, 2026, our and TJHA’s investment in SLF JV consisted of an unsecured note of $17.6 million and $2.5 million, respectively; and membership interest of $19.2 million and $2.7 million, respectively. As of February 28, 2026, our and TJHA’s investment in SLF JV consisted of an unsecured note of $17.6 million and $2.5 million, respectively; and membership interest of $19.2 million and $2.7 million, respectively. As of May 31, 2026 and February 28, 2026, our investment in the unsecured note of SLF JV had a fair value of $15.7 million and $16.1 million, respectively, and our investment in the membership interests of SLF JV had a fair value of $5.0 million and $1.5 million, respectively.

Previous wording

On October 28, 2022, SLF 2022 issued $402.1 million of debt through the JV CLO trust. The 2022 JV CLO Notes were issued pursuant to the JV Indenture, with the Trustee. As part of the transaction, we purchased 87.5% of the Class E Notes from SLF 2022 with a par value of $12.3 million.

Current wording

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

Previous wording

On September 24, 2025, the Company completed the first refinancing of SLF 2022. This refinancing, among other things, extended the SLF 2022’s investment period to October 2028. As part of this refinancing, the Company purchased $8.8 million of the SLF 2022-1 Class E-R Notes tranche at par. Concurrently, the existing $12.3 million of the SLF 2022-1 Class E Notes were repaid. The Company also paid $1.6 million of additional equity investment related to the refinancing to SLF JV.

Current wording

On September 24, 2025, we completed the first refinancing of SLF 2022. This refinancing, among other things, extended SLF 2022’s investment period to October 2028. As part of this refinancing, we purchased $8.8 million of the SLF 2022-1 Class E-R Notes tranche at par. Concurrently, the existing $12.3 million of the SLF 2022-1 Class E Notes were repaid. We also paid $1.6 million of additional equity investment related to the refinancing of SLF JV. As of May 31, 2026 and February 28, 2026, the fair value of these Class E-R Notes was $8.3 million and $8.4 million, respectively.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

On January 22, 2008, we entered into a collateral management agreement with Saratoga CLO, pursuant to which we act as its collateral manager. The Saratoga CLO was initially refinanced in October 2013 with its reinvestment period extended to October 2016. On November 15, 2016, we completed a second refinancing of the Saratoga CLO with its reinvestment period extended to October 2018.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

On February 11, 2020, we entered into an unsecured loan agreement (“CLO 2013-1 Warehouse 2 Loan”) with Saratoga Investment Corp. CLO 2013-1 Warehouse 2, Ltd (“CLO 2013-1 Warehouse 2”), a wholly owned subsidiary of Saratoga CLO, pursuant to which CLO 2013-1 Warehouse 2 may borrow from time to time up to $20.0 million from the Company in order to provide capital necessary to support warehouse activities. On October 23, 2020, the availability under the CLO 2013-1 Warehouse 2 Loan was increased to $25.0 million, which was immediately fully drawn and, which expires on August 20, 2021. The interest rate was also amended to be based on a pricing grid, starting at an annual rate of 3M USD LIBOR + 4.46%. During the fourth quarter ended February 28, 2021, the CLO 2013-1 Warehouse 2 Ltd was repaid in full.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

The Saratoga CLO remains effectively 100% owned and managed by Saratoga Investment Corp. We receive a base management fee of 0.10% per annum and a subordinated management fee of 0.40% per annum of the outstanding principal amount of Saratoga CLO’s assets, paid quarterly to the extent of available proceeds. Prior to the second refinancing and the issuance of the 2013-1 Amended CLO Notes, we received a base management fee of 0.25% per annum and a subordinated management fee of 0.25% per annum of the outstanding principal amount of Saratoga CLO’s assets, paid quarterly to the extent of available proceeds.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

During the three months ended November 30, 2025, we invested $72.1 million in new and existing portfolio companies and had $55.9 million in aggregate amount of exits and repayments, including $54.9 million of proceeds from sales and repayments of debt and equity investments in the current period and $1.0 million of additional proceeds from sales of equity investments realized in a prior period, resulting in net investments of $(16.2) million for the period. During the three months ended November 30, 2024, we invested $84.4 million in new and existing portfolio companies and had $160.4 million in aggregate amount of exits and repayments resulting in net repayments of $(76.0) million for the period.

Current wording

During the three months ended May 31, 2026, we invested $79.2 million in new and existing portfolio companies and had $48.4 million in aggregate amount of exits and repayments, including $47.8 million of proceeds from sales and repayments of debt and equity investments in the current period and $0.6 million of additional proceeds from sales of equity investments realized in a prior period, resulting in net investments of $30.8 million for the period. During the three months ended May 31, 2025, we invested $50.1 million in new and existing portfolio companies and had $64.3 million in aggregate amount of exits and repayments resulting in net repayments of $(14.2) million for the period.

Previous wording

At November 30, 2025, our investment in the subordinated notes of Saratoga CLO, a collateralized loan obligation fund, had a fair value of $0.0 million and constituted 0.0% of our portfolio. This investment constitutes a first loss position in a portfolio that, as of November 30, 2025 and February 28, 2025, was composed of $427.7 million and $527.1 million, respectively, in aggregate principal amount of primarily senior secured first lien term loans. In addition, as of November 30, 2025, we also own $9.4 million in aggregate principal of the F-2-R-3 Notes in the Saratoga CLO, which only rank senior to the subordinated notes.

Current wording

At May 31, 2026, our investment in the subordinated notes of Saratoga CLO, a collateralized loan obligation fund, had a fair value of $0.0 million and constituted 0.0% of our portfolio. This investment constitutes a first loss position in a portfolio that, as of May 31, 2026 and February 28, 2026, was composed of $361.1 million and $391.0 million, respectively, in aggregate principal amount of primarily senior secured first lien term loans. In addition, as of May 31, 2026, we also own $9.4 million in aggregate principal of the F-2-R-3 Notes in the Saratoga CLO, which only rank senior to the subordinated notes, and had a fair value of $0.0 million.

Previous wording

We do not consolidate the Saratoga CLO portfolio in our consolidated financial statements. Accordingly, the metrics below do not include the underlying Saratoga CLO portfolio investments. However, at November 30, 2025, $386.2 million or 97.0% of the Saratoga CLO portfolio investments in terms of market value had a CMR (as defined below) color rating of green or yellow and three Saratoga CLO portfolio investments were on non-accrual with a fair value of $0.1 million. At February 28, 2025, $484.3 million or 98.4% of the Saratoga CLO portfolio investments in terms of market value had a CMR color rating of green or yellow and eight of the Saratoga CLO portfolio investments were in default with a fair value of $4.4 million. For more information relating to the Saratoga CLO, see the audited financial statements for Saratoga in our Annual Report on Form 10-K for the fiscal year ended February 28, 2025.

Current wording

We do not consolidate the Saratoga CLO portfolio in our consolidated financial statements. Accordingly, the metrics below do not include the underlying Saratoga CLO portfolio investments. However, at May 31, 2026, $323.3 million or 98.2% of the Saratoga CLO portfolio investments in terms of market value had a CMR (as defined below) color rating of green or yellow and three Saratoga CLO portfolio investments were in default with a fair value of $5.9 million. At February 28, 2026, $348.3 million or 98.4% of the Saratoga CLO portfolio investments in terms of market value had a CMR color rating of green or yellow and one of the Saratoga CLO portfolio investments were in default with a fair value of $0.9 million. For more information relating to the Saratoga CLO, see the audited financial statements for Saratoga in our Annual Report on Form 10-K for the fiscal year ended February 28, 2026.

Previous wording

Operating results for the three and nine months ended November 30, 2025 and November 30, 2024 was as follows:

Current wording

Operating results for the three months ended May 31, 2026 and May 31, 2025 was as follows:

Previous wording

The composition of our investment income for the three and nine months ended November 30, 2025 and November 30, 2024 was as follows:

Current wording

The composition of our investment income for three months ended May 31, 2026 and May 31, 2025 was as follows:

Previous wording

For the three months ended November 30, 2025, total investment income decreased $4.2 million, or 11.8%, to $31.6 million from $35.9 million for the three months ended November 30, 2024. Interest income from investments decreased $4.0 million, or 13.1%, to $26.7 million for the three months ended November 30, 2025 from $30.8 million for the three months ended November 30, 2024. Interest income from investments decreased primarily due to the decrease in the weighted average current yield on investments to 9.7%, down from 10.8% at November 30, 2024, reflecting both the reduction in SOFR base rates during this period, as well as the tightening of spreads in the middle market.

Current wording

For the three months ended May 31, 2026, total investment income decreased $1.5 million, or 4.8%, to $30.8 million from $32.3 million for the three months ended May 31, 2025. Interest income from investments increased $0.1 million, or 0.4%, to $28.1 million for the three months ended May 31, 2026 from $28.0 million for the three months ended May 31, 2025. Interest income from investments increased primarily due to an increase of $158.0 million, or 16.3%, in total investments, from $968.3 million at May 31, 2025 to $1,126.3 million as of May 31, 2026, partially offset by a decrease in the weighted average current yield on investments to 9.8%, down from 10.6% at May 31, 2025, primarily due to the reduction in SOFR base rates during this period, as well as the tightening of spreads in the middle market.

Previous wording

For the three and nine months ended November 30, 2025 and November 30, 2024, total PIK income was $0.7 million and $2.3 million, respectively and $0.8 million and $3.3 million, respectively. The higher levels last year reflected the Knowland investment income recognized last year.

Current wording

For the three months ended May 31, 2026 and May 31, 2025, total PIK income was $0.8 million and $0.8 million, respectively.

Previous wording

For the three months ended November 30, 2025 and November 30, 2024, interest from cash and cash equivalents was $1.9 million and $1.6 million, respectively. The increase of $0.3 million was due to increased cash and cash equivalents balances during this period as compared to last year, reflecting the significant levels of repayments experienced during this period.

Current wording

For the three months ended May 31, 2026 and May 31, 2025, interest from cash and cash equivalents was $0.5 million and $2.0 million, respectively. The decrease of $1.5 million was due to decreased cash and cash equivalents balances during the three months ended May 31, 2026 as compared to the three months ended May 31, 2025, reflecting the significant levels of originations experienced during the three months ended May 31, 2026 and prior to that.

Previous wording

Management fee income reflects the fee income received for managing the Saratoga CLO. For the three months ended November 30, 2025 and November 30, 2024, total management fee income was $0.6 million and $0.8 million, respectively. For the nine months ended November 30, 2025 and 2024, total management fee income was $2.0 million and $2.4 million, respectively. The reduction reflects the reduction of the asset levels in the Saratoga CLO as it is currently in winddown mode.

Current wording

Management fee income reflects the fee income received for managing the Saratoga CLO. For the three months ended May 31, 2026 and May 31, 2025, total management fee income was $0.5 million and $0.7 million, respectively. The reduction reflects the reduction of the asset levels in the Saratoga CLO as it is currently in winddown mode.

Previous wording

For the three and nine months ended November 30, 2025 and November 30, 2024, total structuring and advisory fee income was $0.7 million and $0.7 million, respectively and $1.2 million and $1.2 million. Structuring and advisory fee income represents fee income earned and received performing certain investment and advisory activities during the closing of new investments.

Current wording

For the three months ended May 31, 2026 and May 31, 2025, total structuring and advisory fee income was $0.7 million and $0.3 million, respectively. Structuring and advisory fee income represents fee income earned and received performing certain investment and advisory activities during the closing of new investments.

Previous wording

For the three and nine months ended November 30, 2025 and November 30, 2024, other income was $0.6 million and $0.9 million, respectively and $0.9 million and $1.9 million, respectively. Other income includes origination fees, monitoring and amendment fees and prepayment fees and is recorded in the consolidated statements of operations when earned.

Current wording

For the three months ended May 31, 2026 and May 31, 2025, other income was $0.1 million and $0.3 million, respectively. Other income primarily includes prepayment, monitoring and amendment fees and is recorded in the consolidated statements of operations when earned.

Previous wording

The composition of our operating expenses for the three and nine months ended November 30, 2025 and November 30, 2024 was as follows:

Current wording

The composition of our operating expenses for the three months ended May 31, 2026 and May 31, 2025 was as follows:

Previous wording

As of November 30, 2025 and February 28, 2025, the SBA debentures represented 22.0% and 21.4% of overall debt, respectively.

Current wording

As of May 31, 2026 and February 28, 2026, the SBA debentures represented 26.1% and 21.6% of overall debt, respectively.

Previous wording

For the three months ended November 30, 2025, base management fees increased $0.02 million, or 0.5%, from $4.43 million to $4.41 million compared to the three months ended November 30, 2024. The increase in base management fees results from the 0.5% increase in the average value of our total assets, less cash and cash equivalents, from $1,011.2 million for the three months ended November 30, 2024 to $1,016.4 million for the three months ended November 30, 2025.

Current wording

For the three months ended May 31, 2026, base management fees increased $0.6 million, or 14.7%, from $4.3 million to $5.0 million compared to the three months ended May 31, 2025. The increase in base management fees results from the 14.7% increase in the average value of our total assets, less cash and cash equivalents, from $982.4 million for the three months ended May 31, 2025 to $1,126.8 million for the three months ended May 31, 2026.

Previous wording

For the three months ended November 30, 2025, incentive management fees decreased $0.7 million to $2.4 million, or 21.3%, compared to $3.1 million the three months ended November 30, 2024. The incentive fee on income decreased from $3.1 million to $2.4 million for the three months ended November 30, 2024 and 2025, respectively, reflecting the decrease in net investment income during the three months ended November 30, 2025 as compared to the three months ended November 30, 2024. The incentive fee on capital gains remained unchanged at $0.0 million for both the three months ended November 30, 2024 and November 30, 2025, reflecting no incentive fee on net realized and unrealized depreciation recognized during both these periods, with the liability floor capped at zero.

Current wording

For the three months ended May 31, 2026, incentive management fees decreased $0.6 million to $1.9 million, or 25.4%, compared to $2.5 million for the three months ended May 31, 2025. The incentive fee on income decreased from $2.5 million to $1.9 million for the three months ended May 31, 2025 and 2026, respectively, reflecting the decrease in net investment income during the three months ended May 31, 2026 as compared to the three months ended May 31, 2025. The incentive fee on capital gains remained $0.0 million for both the three months ended May 31, 2026 and May 31, 2025, reflecting no incentive fee on net realized and unrealized depreciation recognized during both these periods, with the liability floor capped at zero.

Previous wording

For the three months ended November 30, 2025, professional fees increased $0.2 million, or 29.4% compared to the three months ended November 30, 2024.

Current wording

For the three months ended May 31, 2026, professional fees decreased $0.2 million, or 24.0% compared to the three months ended May 31, 2025.

Previous wording

For the three months ended November 30, 2025, general and administrative expenses increased $0.1 million, or 17.0% compared to the three months ended November 30, 2024.

Current wording

For the three months ended May 31, 2026, general and administrative expenses decreased $0.05 million, or 7.0% compared to the three months ended May 31, 2025.

Previous wording

As discussed above, the decrease in interest and debt financing expenses for the three months ended November 30, 2025 compared to the three months ended November 30, 2024 is primarily attributable to a decrease in the overall average dollar amount of outstanding debt. For the three months ended November 30, 2025 and November 30, 2024, the average borrowings outstanding under the Encina Credit Facility was $0.0 million and $32.5 million, respectively, and the average weighted average interest rate on the outstanding borrowing under the Encina Credit Facility was 8.8% and 9.4%, respectively. For the three months ended November 30, 2025 and November 30, 2024, the average borrowings outstanding under the Valley Credit Facility was $32.5 million and $0.0 million, respectively, and the average weighted average interest rate on the outstanding borrowing under the Valley Credit Facility was 6.9% and 0.0%, respectively. For the three months ended November 30, 2025 and November 30, 2024, the average borrowings outstanding under the Live Oak Credit Facility was $37.5 million and $20.0 million, respectively, and the average weighted average interest rate on the outstanding borrowing under the Live Oak Credit Facility was 8.4% and 9.0%, respectively. For the three months ended November 30, 2025 and November 30, 2024, the average borrowings outstanding of SBA debentures was $170.0 million and $214.0 million, respectively. For the three months ended November 30, 2025 and November 30, 2024, the weighted average interest rate on the outstanding borrowings of the SBA debentures was 3.0% and 3.3%, respectively. For the three months ended November 30, 2025 and November 30, 2024, the average borrowings outstanding of our Notes Payable was $535.3 million and $571.4 million, respectively. For the three months ended November 30, 2025 and November 30, 2024, the weighted average interest rate on the Notes Payable was 5.9% and 6.1%, respectively.

Current wording

As discussed above, the increase in interest and debt financing expenses for the three months ended May 31, 2026 compared to the three months ended May 31, 2025 is primarily attributable to an increase in the overall average dollar amount of outstanding debt. For the three months ended May 31, 2026 and May 31, 2025, the average borrowings outstanding under the Encina Credit Facility was $0.0 million and $32.5 million, respectively, and the average weighted average interest rate on the outstanding borrowing under the Encina Credit Facility was 0.00% and 8.86%, respectively. For the three months ended May 31, 2026 and May 31, 2025, the average borrowings outstanding under the Live Oak Credit Facility was $37.5 million and $32.4 million, respectively, and the average weighted average interest rate on the outstanding borrowing under the Live Oak Credit Facility was 7.83% and 8.50%, respectively. For the three months ended May 31, 2026 and May 31, 2025, the average borrowings outstanding under the Valley Credit Facility was $32.5 million and $0.0 million, respectively, and the average weighted average interest rate on the outstanding borrowing under the Valley Credit Facility was 6.66% and 0.00%, respectively. For the three months ended May 31, 2026 and May 31, 2025, the average borrowings outstanding of SBA debentures was $203.2 million and $170.0 million, respectively. For the three months ended May 31, 2026 and May 31, 2025, the weighted average interest rate on the outstanding borrowings of the SBA debentures was 3.60% and 3.04%, respectively. For the three months ended May 31, 2026 and May 31, 2025, the average borrowings outstanding of our Notes Payable was $523.5 million and $557.9 million, respectively. For the three months ended May 31, 2026 and May 31, 2025, the weighted average interest rate on the Notes Payable was 6.96% and 6.00%, respectively.

Previous wording

The weighted average dollar amount of our unsecured notes for the three and nine months ended November 30, 2025 and November 30, 2024 was as follows:

Current wording

The weighted average dollar amount of our unsecured notes for the three months ended May 31, 2026 and May 31, 2025 was as follows:

Previous wording

For the three and nine months ended November 30, 2025 and November 30, 2024, there were income tax expense (benefits) of $(0.2) million and $0.0 million, respectively and $(0.2) million and $0.1 million This relates to net deferred federal and state income tax expense (benefit) with respect to operating gains and losses and income derived from equity investments held in entities that are treated as corporations for U.S. federal income tax purposes, as well as current U.S. federal and state income taxes on those operating gains and losses when realized.

Current wording

For the three months ended May 31, 2026 and May 31, 2025, there were income tax expense (benefits) of ($0.02) million and $0.05 million, respectively. This relates to net deferred federal and state income tax expense (benefit) with respect to operating gains and losses and income derived from equity investments held in entities that are treated as corporations for U.S. federal income tax purposes, as well as current U.S. federal and state income taxes on those operating gains and losses when realized.

Previous wording

For the three months ended November 30, 2025, we had $54.9 million of sales, repayments, exits or restructurings resulting in $3.1 million of net realized gains. For the nine months ended November 30, 2025, we had $149.0 million of sales, repayments, exits or restructurings resulting in $6.0 million of net realized gains.

Current wording

For the three months ended May 31, 2026, we had $48.4 million of sales, repayments, exits or restructurings resulting in $0.2 million of net realized gains.

Previous wording

The most significant cumulative net change in realized gains (losses) for the nine months ended November 30, 2025 were the following (dollars in thousands):

Current wording

The most significant cumulative net change in realized gains (losses) for the three months ended May 31, 2026 were the following (dollars in thousands):

Previous wording

The most significant cumulative net change in realized gains (losses) for the nine months ended November 30, 2024 were the following (dollars in thousands):

Current wording

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

Previous wording

The $3.2 million of net realized gains was from the sale of the equity position in our Identity Automation Systems investment.

Current wording

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