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Get filing alertsSaratoga Investment Corp. reported a net decrease in net assets from operations of $6.7M in the fiscal second quarter, compared with a net increase of $13.3M a year earlier.
Filed October 6, 2026 · Period ending August 31, 2026 · Compared to 10-Q Oct 7, 2025 · ~1 min read
Key Financials
SEC XBRL| Metric | PriorAug 31, 2025 | CurrentAug 31, 2026 | Δ |
|---|---|---|---|
| Net income | $13.3M | -$6.7M | ▼ n/m |
| Diluted EPS | $0.84 | -$0.41 | ▼ n/m |
| NAV per share | $25.61 | $22.15 | ▼ -13.5% |
| Cash & equivalents | $105.7M | $80.1M | ▼ -24.2% |
| Long-term debt | $786.4M | $902.4M | ▲ +14.8% |
| Total assets | $1.21B | $1.26B | ▲ +4.1% |
As reported in XBRL by the filer · 10-Q vs 10-Q. Income figures cover the fiscal quarter (not year-to-date); cash & assets are period-end balances. n/m = not meaningful (sign change; a % would mislead). about this table · verify on EDGAR →
Key Changes
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high
Net asset value per share fell 9.3% to $22.15 from $24.42 at the end of the prior fiscal year.
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medium
Total investment income rose 1.8% to $31.2M in the quarter, driven by a 9.2% increase in interest from investments to $28.8M, which the company attributes to an increase of $154.9 million, or 15.6%, in total investments from $995.3 million at August 31, 2025 to $1,150.2 million as of August 31, 2026.
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medium
Net investment income declined 19.6% to $7.3M, while total operating expenses increased 10.8% to $23.9M.
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low
The company's asset coverage ratio improved to 171.9% from 168.4% at the end of the prior fiscal year, providing greater cushion above the regulatory minimum.
Summary
Saratoga Investment Corp. reported a net decrease in net assets from operations of $6.7M for the fiscal second quarter ended August 31, 2026, compared with a net increase of $13.3M in the same period last year. Net investment income decreased 19.6% to $7.3M, while total investment income increased 1.8% to $31.2M and total operating expenses increased 10.8% to $23.9M.
Total investment income benefited from a 9.2% increase in interest from investments to $28.8M, which the company attributes to an increase of $154.9 million, or 15.6%, in total investments from $995.3 million at August 31, 2025 to $1,150.2 million as of August 31, 2026. Interest from cash and cash equivalents fell 81.3% to $441,110. Management fee income declined 84.8% to $101,090.
Net asset value per share decreased 9.3% to $22.15 from $24.42 at the end of the prior fiscal year. Cash and cash equivalents increased to $80.1M from $1.7M at the end of the prior fiscal year.
Section-by-Section Diff
MD&A
Unfunded commitments rose and several significant financing transactions were completed after quarter-end.
Previous filing · verify on EDGAR →
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 filing · verify on EDGAR →
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.
The Company now discloses that legislation increased the individual SBIC leverage limit to $250.0 million and the combined limit to $475.0 million, expanding its potential SBA-guaranteed debenture capacity.
Previous filing · verify on EDGAR →
As of August 31, 2025, our and TJHA’s investment in SLF JV consisted of an unsecured note of $17.6 million and $2.5 million, respectively; and membership interest of $17.6 million and $2.5 million, respectively.
Current filing · verify on EDGAR →
As of August 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.
The fair value of the Company's membership interest in SLF JV increased, while the unsecured note fair value decreased.
Previous filing · verify on EDGAR →
As of August 31, 2025 and February 28, 2025, our off-balance sheet arrangements consisted of $96.2 million and $126.7 million, respectively, of unfunded commitments outstanding to provide debt financing to its portfolio companies or to fund limited partnership interests.
Current filing · verify on EDGAR →
As of August 31, 2026 and February 28, 2026, the Company’s off-balance sheet arrangements consisted of $181.1 million and $153.1 million, respectively, of unfunded commitments outstanding to provide debt financing to its portfolio companies or to fund limited partnership interests.
Unfunded commitments increased significantly year-over-year.
Previous filing · verify on EDGAR →
Our asset coverage ratio, as defined in the 1940 Act, was 166.6% as of August 31, 2025 and 162.9% as of February 28, 2025.
Current filing · verify on EDGAR →
Our asset coverage ratio, as defined in the 1940 Act, was 171.9% as of August 31, 2026 and 168.4% as of February 28, 2026.
The asset coverage ratio improved year-over-year.
Added in current filing · verify on EDGAR →
On September 17, 2026, the Company completed the sixth refinancing of the Saratoga CLO. This refinancing, among other things, extended the Saratoga CLO reinvestment period to October 2029, extended its legal maturity to October 2037, and established a non-call period ending in April 2028.
The Company disclosed several significant post-quarter events, including the refinancing of the Saratoga CLO, redemption of notes, and additional note issuances.
Previous filing · verify on EDGAR →
Total Long-Term Debt Obligations $ 786,375 $ 219,500 $ 396,875 $ 20,000 $ 150,000
Current filing · verify on EDGAR →
Total Long-Term Debt Obligations $ 902,375 $ 218,000 $ 236,375 $ 319,000 $ 129,000
Total long-term debt obligations increased, with a shift in maturity profile toward longer-dated debt.
Risk Factors
Added a new risk factor about the early redemption feature in the 7.25% 2029 Notes and removed the covenant-lite loans risk factor.
Added in current filing · verify on EDGAR →
The early redemption feature in our outstanding 7.25% 2029 Notes increases our dependence on certain key individuals and could result in early repayment obligations at a time when we may not have sufficient cash, which could trigger cross defaults under our other indebtedness.
The Company added a new risk factor describing the early redemption feature in its 7.25% 2029 Notes, which allows holders to demand repayment if key individuals cease to be employed or if the Company violates certain 1940 Act provisions. The Company notes that Mr. Steenkamp's planned departure as CFO effective October 31, 2026 could trigger this feature, and failure to repay could cause an event of default and cross-default under other indebtedness.
Removed from previous filing · verify on EDGAR →
We are subject to risks to the extent we invest in covenant-lite loans.
The Company removed the risk factor regarding investments in covenant-lite loans, which had described the risks of fewer maintenance covenants and potentially diminished recovery values.
Legal Proceedings
The legal proceedings disclosure was updated to remove the specific names of wholly owned subsidiaries and add a sentence about ordinary course litigation and regulatory proceedings.
Show 1 minor / wording change
Previous filing · verify on EDGAR →
Neither we nor our wholly owned subsidiaries, Saratoga Investment Funding LLC, Saratoga Investment Funding II, LLC, Saratoga Investment Corp. SBIC II LP, or Saratoga Investment Corp. SBIC III LP, are currently subject to any material legal proceedings.
Current filing · verify on EDGAR →
Neither we nor our wholly owned subsidiaries are currently subject to any material legal proceedings. From time to time, we, our consolidated subsidiaries and/or Saratoga Investment Advisors may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. Our business also is subject to extensive regulation, which may result in regulatory proceedings against us.
The company removed the specific names of its wholly owned subsidiaries from the statement that no material legal proceedings exist, and added language acknowledging that it may be involved in ordinary course litigation and regulatory proceedings. This broadens the disclosure to cover potential legal matters involving the company, its subsidiaries, and its advisor.
Notes
Previous filing · verify on EDGAR →
During the three and six months ended August 31, 2025, the Company did not purchase any shares of common stock pursuant to the Share Repurchase Plan.
Current filing · verify on EDGAR →
During the three months ended August 31, 2026, the Company purchased 444,124 shares of common stock, at an average price of $18.91 for approximately $8.4 million pursuant to the Share Repurchase Plan.
The Company resumed share repurchases, buying 444,124 shares for $8.4 million in the current quarter, whereas no repurchases occurred in the prior-year period.
Added in current filing · verify on EDGAR →
On September 4, 2026, the Company received notification from the SBA that SBIC III LP’s individual leverage limit was increased to $250.0 million, providing an additional $75.0 million of long-term capital in the form of SBA-guaranteed debentures.
The SBA increased SBIC III LP's leverage limit to $250.0 million, providing an additional $75.0 million of long-term capital, a new development not present in the prior filing.
Added in current filing · verify on EDGAR →
On September 18, 2026, the Company redeemed, in full, $105.5 million aggregate principal amount of the issued and outstanding 6.00% 2027 Notes.
The Company redeemed all $105.5 million of its 6.00% 2027 Notes after the reporting period, a significant debt extinguishment not present in the prior filing.
Added in current filing · verify on EDGAR →
On September 24, 2026, the Company issued an additional $23.1 million in aggregate principal amount of the 8.00% 2031 Notes, including the underwriters’ exercise in full of their over-allotment option.
The Company issued additional 8.00% 2031 Notes after the reporting period, a new financing activity not present in the prior filing.
Financial Statements
Primary statements as printed on the EDGAR filing (iXBRL face). Companyfacts is used only when a statement is not on the HTML face. Not generated by the model.
Consolidated Statements of Operations (Unaudited)
| Description | Three months ended August 31, 2026 | Three months ended August 31, 2025 | Six months ended August 31, 2026 | Six months ended August 31, 2025 |
|---|---|---|---|---|
| INVESTMENT INCOME | ||||
| Interest from investments | ||||
| Interest income: | ||||
| Non-control/Non-affiliate investments | 26,680,966 | 23,697,449 | 52,686,744 | 49,162,112 |
| Affiliate investments | 710,089 | 684,587 | 1,436,183 | 1,280,211 |
| Control investments | 687,577 | 1,191,555 | 1,374,293 | 2,382,216 |
| Payment in kind interest income: | ||||
| Non-control/Non-affiliate investments | 176,321 | 121,084 | 349,612 | 289,313 |
| Affiliate investments | 524,784 | 604,880 | 1,028,394 | 1,189,629 |
| Control investments | 19,829 | 77,880 | 39,415 | 77,880 |
| Total interest from investments | 28,799,566 | 26,377,435 | 56,914,641 | 54,381,361 |
| Interest from cash and cash equivalents | 441,110 | 2,360,397 | 995,496 | 4,387,608 |
| Management fee income | 101,090 | 663,632 | 646,078 | 1,368,807 |
| Dividend income: | ||||
| Non-control/Non-affiliate investments | 369,276 | 127,689 | 369,276 | 689,872 |
| Control investments | 752,370 | 903,439 | 1,531,222 | 1,339,857 |
| Total dividend from investments | 1,121,646 | 1,031,128 | 1,900,498 | 2,029,729 |
| Structuring and advisory fee income | 563,616 | 221,600 | 1,219,979 | 485,975 |
| Other income | 142,196 | (28,436) | 269,457 | 290,893 |
| Total investment income | 31,169,224 | 30,625,756 | 61,946,149 | 62,944,373 |
| OPERATING EXPENSES | ||||
| Interest and debt financing expenses | 14,061,404 | 12,372,030 | 27,711,687 | 24,823,895 |
| Base management fees | 5,065,837 | 4,374,324 | 10,035,890 | 8,707,656 |
| Incentive management fees expense (benefit) | 1,827,237 | 2,271,173 | 3,719,298 | 4,807,686 |
| Professional fees | 626,850 | 649,899 | 1,158,086 | 1,349,099 |
| Administrator expenses | 1,350,000 | 1,283,333 | 2,700,000 | 2,533,333 |
| Insurance | 80,598 | 74,310 | 161,196 | 148,620 |
| Directors fees and expenses | 125,103 | 118,500 | 251,103 | 250,000 |
| General and administrative | 680,951 | 412,769 | 1,281,217 | 1,058,180 |
| Income tax expense (benefit) | 46,080 | (11,315) | 29,521 | 43,139 |
| Total operating expenses | 23,864,060 | 21,545,023 | 47,047,998 | 43,721,608 |
| NET INVESTMENT INCOME | 7,305,164 | 9,080,733 | 14,898,151 | 19,222,765 |
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||
| Net realized gain (loss) from investments: | ||||
| Non-control/Non-affiliate investments | 2,057,105 | 52,691 | 1,568,957 | 2,315,675 |
| Control investments | - | - | 638,355 | 638,355 |
| Net realized gain (loss) from investments | 2,057,105 | 52,691 | 2,207,312 | 2,954,030 |
| Income tax (provision) benefit from realized gain on investments | (71,949) | - | (71,949) | - |
| Net change in unrealized appreciation (depreciation) on investments: | ||||
| Non-control/Non-affiliate investments | (18,387,829) | 478,796 | (30,315,013) | 850,944 |
| Affiliate investments | (1,515,830) | 139,577 | (3,934,442) | 93,633 |
| Control investments | 3,439,596 | 3,109,340 | 2,608,261 | 3,727,113 |
| Net change in unrealized appreciation (depreciation) on investments | (16,464,063) | 3,727,713 | (31,641,194) | 4,671,690 |
| Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | 512,564 | 423,998 | 1,043,388 | 368,913 |
| Net realized and unrealized gain (loss) on investments | (13,966,343) | 4,204,402 | (28,462,443) | 7,994,633 |
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | (6,661,179) | 13,285,135 | (13,564,292) | 27,217,398 |
| WEIGHTED AVERAGE BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE | (0.41) | 0.84 | (0.84) | 1.75 |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED | 16,155,202 | 15,775,387 | 16,203,415 | 15,560,114 |
Consolidated Statements of Assets and Liabilities
| Description | August 31, 2026 (unaudited) | February 28, 2026 |
|---|---|---|
| ASSETS | ||
| Investments at fair value | ||
| Non-control/Non-affiliate investments (amortized cost of $1,082,091,998 and $1,011,840,007, respectively) | 1,056,184,544 | 1,016,247,566 |
| Affiliate investments (amortized cost of $49,910,512 and $49,429,192, respectively) | 49,257,789 | 52,710,911 |
| Control investments (amortized cost of $77,083,090 and $75,118,675, respectively) | 44,748,011 | 40,175,335 |
| Total investments at fair value (amortized cost of $1,209,085,600 and $1,136,387,874, respectively) | 1,150,190,344 | 1,109,133,812 |
| Cash and cash equivalents | 80,087,303 | 1,680,070 |
| Cash and cash equivalents, reserve accounts | 15,786,427 | 20,105,683 |
| Interest receivable (net of reserve of $1,265,898 and $470,751, respectively) | 9,122,307 | 7,314,053 |
| Management fee receivable | 229,150 | 249,720 |
| Other assets | 847,327 | 781,766 |
| Total assets | 1,256,262,858 | 1,139,265,104 |
| LIABILITIES | ||
| Revolving credit facilities | 70,000,000 | 70,000,000 |
| Deferred debt financing costs, revolving credit facilities | (1,236,703) | (1,670,816) |
| SBA debentures payable | 213,000,000 | 160,000,000 |
| Deferred debt financing costs, SBA debentures payable | (4,792,550) | (3,888,087) |
| 4.35% Notes Payable 2027 | 75,000,000 | 75,000,000 |
| Discount on 4.35% notes payable 2027 | (41,071) | (108,898) |
| Deferred debt financing costs, 4.35% notes payable 2027 | (170,781) | (344,393) |
| 6.25% Notes Payable 2027 | 15,000,000 | 15,000,000 |
| Deferred debt financing costs, 6.25% notes payable 2027 | (94,894) | (130,839) |
| 6.00% Notes Payable 2027 | 105,500,000 | 105,500,000 |
| Discount on 6.00% notes payable 2027 | (27,924) | (48,361) |
| Deferred debt financing costs, 6.00% notes payable 2027 | (470,739) | (823,774) |
| 8.00% Notes Payable 2027 | 46,000,000 | 46,000,000 |
| Deferred debt financing costs, 8.00% notes payable 2027 | (405,603) | (580,514) |
| 8.125% Notes Payable 2027 | 60,375,000 | 60,375,000 |
| Deferred debt financing costs, 8.125% notes payable 2027 | (543,519) | (748,873) |
| 8.50% Notes Payable 2028 | 57,500,000 | 57,500,000 |
| Deferred debt financing costs, 8.50% notes payable 2028 | (661,105) | (866,230) |
| 7.25% Notes Payable 2029 | 25,000,000 | - |
| Discount on 7.25% notes payable 2029 | (442,158) | - |
| Deferred debt financing costs, 7.25% notes payable 2029 | (115,176) | - |
| 7.25% Notes Payable 2030 | 50,000,000 | 50,000,000 |
| Discount on 7.25% notes payable 2030 | (394,008) | (435,318) |
| Deferred debt financing costs, 7.25% notes payable 2030 | (777,418) | (775,165) |
| 7.50% Notes Payable 2031 | 100,000,000 | 100,000,000 |
| Deferred debt financing costs, 7.50% notes payable 2031 | (3,171,759) | (3,298,905) |
| 8.00% Notes Payable 2031 | 85,000,000 | - |
| Deferred debt financing costs, 8.00% notes payable 2031 | (2,884,102) | - |
| Base management and incentive fees payable | 6,893,075 | 6,602,819 |
| Deferred tax liability | 3,600,349 | 4,579,522 |
| Accounts payable and accrued expenses | 853,687 | 1,771,915 |
| Interest and debt fees payable | 5,537,756 | 3,904,143 |
| Directors fees payable | - | 5,500 |
| Due to Manager | 622,572 | 590,624 |
| Current income tax payable | 33,106 | - |
| Total liabilities | 903,686,035 | 743,109,350 |
| Commitments and contingencies (See Note 9) | ||
| NET ASSETS | ||
| Common stock, par value $0.001, 100,000,000 common shares authorized, 15,915,928 and 16,224,198 common shares issued and outstanding, respectively | 15,916 | 16,224 |
| Capital in excess of par value | 433,529,752 | 439,202,477 |
| Total distributable deficit | (80,968,845) | (43,062,947) |
| Total net assets | 352,576,823 | 396,155,754 |
| Total liabilities and net assets | 1,256,262,858 | 1,139,265,104 |
| NET ASSET VALUE PER SHARE | 22.15 | 24.42 |
Consolidated Statements of Cash Flows (Unaudited)
| Description | Six months ended August 31, 2026 | Six months ended August 31, 2025 |
|---|---|---|
| Operating activities | ||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | (13,564,292) | 27,217,398 |
| ADJUSTMENTS TO RECONCILE NET INCREASE (DECREASE) IN NET ASSETS RESULTING | ||
| FROM OPERATIONS TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: | ||
| Distributions from CLO, payment-in-kind and other adjustments to cost | (1,388,957) | (1,061,847) |
| Net accretion of discount on investments | (1,300,982) | (1,164,246) |
| Amortization of deferred debt financing costs | 2,655,180 | 2,502,178 |
| Income tax expense (benefit) | 64,214 | 38,689 |
| Net realized (gain) loss from investments | (2,207,312) | (2,954,030) |
| Net change in unrealized (appreciation) depreciation on investments | 31,641,194 | (4,671,690) |
| Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | (1,043,388) | (368,913) |
| Proceeds from sales and repayments of investments | 87,463,404 | 94,942,515 |
| Purchases of investments | (155,263,880) | (102,307,963) |
| (Increase) decrease in operating assets: | ||
| Interest receivable | (1,808,254) | (1,139,595) |
| Management fee receivable | 20,570 | 35,424 |
| Other assets | (65,561) | (265,363) |
| Increase (decrease) in operating liabilities: | ||
| Base management and incentive fees payable | 290,256 | 414,555 |
| Payable from open trades | - | 2,000,000 |
| Accounts payable and accrued expenses | (918,228) | 239,435 |
| Interest and debt fees payable | 1,633,613 | (749,243) |
| Directors fees payable | (5,500) | - |
| Due to Manager | 31,948 | 281,777 |
| Current income tax payable | 33,106 | - |
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (53,732,869) | 12,989,081 |
| Financing activities | ||
| Borrowings on debt | 53,000,000 | 17,500,000 |
| Issuance of notes | 109,500,000 | - |
| Repayments of notes | - | (25,000,000) |
| Payments of deferred debt financing costs | (4,664,515) | (25,000) |
| Proceeds from issuance of common stock | - | 17,245,664 |
| Capital contribution from Manager | - | 569,322 |
| Payments of cash dividends | (21,606,411) | (27,175,451) |
| Repurchases of common stock | (8,399,346) | - |
| Repurchases fees | (8,882) | - |
| Payments of offering costs | - | (22,833) |
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 127,820,846 | (16,908,298) |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS | 74,087,977 | (3,919,217) |
| CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, BEGINNING OF PERIOD | 21,785,753 | 204,723,924 |
| CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, END OF PERIOD (See note 2) | 95,873,730 | 200,804,707 |
| Supplemental information: | ||
| Interest paid during the period | 23,428,268 | 23,070,960 |
| Cash paid for taxes | 19,286 | 286,573 |
| Supplemental non-cash information: | ||
| Payment-in-kind interest income and other adjustments to cost | 1,388,957 | 1,061,847 |
| Net accretion of discount on investments | 1,300,982 | 1,164,246 |
| Discount on debt issuance, 7.25% notes 2029 | 500,000 | - |
| Amortization of deferred debt financing costs | 2,655,180 | 2,502,178 |
| Stock dividend distribution | 2,735,195 | 3,601,941 |
Amounts as printed on the EDGAR/iXBRL face. Labels, columns, and figures are the filing face, not a GAAP stencil. Interactive statements & notes on EDGAR ↗
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Figures/quotes linked to EDGAR · Narrative written by AI · Oct 6, 2026 · How we verify