Form 8-K

8-K — SARATOGA INVESTMENT CORP.

Accession: 0001213900-26-075941

Filed: 2026-07-07

Period: 2026-07-07

CIK: 0001377936

Item: Results of Operations and Financial Condition

Item: Financial Statements and Exhibits

Documents

8-K — ea0297275-8k_saratoga.htm (Primary)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):

July 7, 2026

SARATOGA INVESTMENT CORP.

(Exact Name of Registrant as Specified in Charter)

Maryland

814-00732

20-8700615

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

535 Madison Avenue

New York, New York

10022

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including

area code (212) 906-7800

Not Applicable

(Former Name or Former Address, if Changed Since

Last Report)

Check the appropriate box below if the Form 8-K

filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see

General Instruction A.2. below):

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which

registered

Common Stock, par value $0.001 per share

SAR

New York Stock Exchange

6.00% Notes due 2027

SAT

New York Stock Exchange

8.00% Notes due 2027

SAJ

New York Stock Exchange

8.125% Notes due 2027

SAY

New York Stock Exchange

8.50% Notes due 2028

SAZ

New York Stock Exchange

7.50% Notes due 2031

SAV

New York Stock Exchange

Indicate by check mark whether the registrant

is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the

Securities Exchange Act of 1934 (17 CFR §240.12b-2).

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. ☐

Item 2.02. Results of Operations and Financial Condition.

On July 7, 2026, Saratoga

Investment Corp. issued a press release announcing its financial results for the quarter ended May 31, 2026. A copy of the press release

is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information disclosed

under this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes

of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference into any filing

made under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

The following Exhibit 99.1

is being furnished herewith to this Current Report on Form 8-K:

Exhibit No.

Description

99.1

Press Release dated July 7, 2026 of Saratoga Investment Corp.*

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

The press release attached hereto as Exhibit 99.1 is “furnished” and not “filed,” as described in Item 2.02 of this Current Report on Form 8-K.

SIGNATURES

Pursuant to the requirements of the Securities

Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SARATOGA INVESTMENT CORP.

Date: July 7, 2026

By:

/s/ Henri J. Steenkamp

Name:

Henri J. Steenkamp

Title:

Financial Officer, Chief Compliance Officer, Treasurer and Secretary

EX-99.1 — PRESS RELEASE DATED JULY 7, 2026 OF SARATOGA INVESTMENT CORP

EX-99.1

Filename: ea029727501ex99-1.htm · Sequence: 2

Exhibit 99.1

Saratoga Investment Corp. Announces Fiscal First

Quarter 2027 Financial Results

Reports Quarterly Asset Growth of 1.6% and Net

Originations of $31 Million, Including Two New Portfolio Companies

Non-Accruals Decreased to 0.0% of Fair Value

and 1.2% of Cost

NEW YORK, July 7, 2026 – Saratoga

Investment Corp. (NYSE: SAR) (“Saratoga Investment” or “the Company”), a business development company (“BDC”),

today announced financial results for its fiscal first quarter 2027 ended May 31, 2026.

Summary Financial Information

The Company’s summarized financial information

is as follows:

For the three months ended and as of

($ in thousands, except per share)

May 31,

2026

February 28,

2026

May 31,

2025

Assets Under Management (AUM)

1,126,334

1,109,134

968,318

Net Asset Value (NAV)

378,455

396,156

396,369

NAV per share

23.23

24.42

25.52

Total Investment Income

30,777

31,123

32,319

Net Investment Income (NII) per share

0.47

0.48

0.66

Adjusted NII per share

0.47

0.53

0.66

Earnings per share

(0.42 )

(0.16 )

0.91

Dividends per share (record date)

0.75

1.00 *

0.75

Return on Equity – last twelve months

4.0 %

9.1 %

9.3 %

– annualized quarter

(7.1 )%

(2.6 )%

14.1 %

Originations

79,151

135,139

50,086

Repayments

48,415

34,020

64,330

* Actual dividend of $1.00 per share, includes the

additional special dividend of $0.25 per share declared during fiscal 2026 third quarter

Christian L. Oberbeck, Chairman and Chief Executive

Officer of Saratoga Investment, commented, “In a quarter defined by sector-wide pressure across private credit, Saratoga’s last

twelve months return on equity of 4.0% continued to beat the BDC industry average of 2.4%, even as we grew assets under management 1.6%

to $1.126 billion on $31 million of net originations. Our core BDC portfolio valuations this quarter reflected portfolio company and market

adjustments, and core BDC portfolio fair value remains within 0.2% of cost, continuing to demonstrate solid overall credit quality in

a challenging and volatile macroeconomic environment.”

“Continuing our track record of strong dividend

distributions, we recently announced a base monthly dividend of $0.25 per share, or $0.75 per share in aggregate for the second quarter

of fiscal 2027. Our annualized second quarter dividend of $0.75 per share represents a 14.0% yield based on the stock price of $21.42

as of July 6, 2026, offering strong current income. Originations and AUM growth during the quarter contributed to adjusted NII of $0.47

per share, compared to $0.53 per share last quarter. Overall, our adjusted NII continues to reflect the impact of declining short-term

interest rates and tight spreads on our largely floating rate asset base, as well as the full period impact of the recent changes to our

capital structure.”

“During the quarter, deal activity remained

robust reflecting the impact of our recent business development efforts, despite persistent sector headwinds and the cautious sentiment

that has taken hold across the broader private credit sector. Market dynamics continued to be very competitive. While our portfolio saw

multiple debt repayments in Q1, our origination activity more than offset those exits, resulting in net originations of $30.8 million

for the quarter from $79.2 million in new originations in two new portfolio companies and ten follow-ons, and including $11.0 million

in six BB and BBB CLO debt investments. Our strong reputation, differentiated market positioning, and the ongoing development of sponsor

relationships continue to create attractive investment opportunities from high quality sponsors. We remain prudent and discerning in our

underwriting approach, particularly in light of the current volatile and uncertain environment.”

“Saratoga’s overall performance is

reflected in our key performance indicators this past quarter and year, including: (i) LTM ROE of 4.0% beating the BDC industry average

of 2.4%, (ii) NAV decrease of $17.9 million, or 4.5%, to $378.5 million from the previous year, (iii) an increase in AUM of $17.2 million,

or 1.6%, to $1.126 billion from the previous quarter, and $158.0 million, or 16.3%, from the previous year, (iv) adjusted NII of $0.47

versus $0.53 per share last quarter, (v) EPS of $(0.42) per share, down from $(0.16) in the previous quarter, and (vi) total dividends

of $0.75 per share, unchanged from last quarter and last year.”

“Sequential quarter NAV per share is down

by 4.9% from $24.42 per share to $23.23 per share. Of the $1.19 per share reduction this quarter, $0.93 was due to the unrealized depreciation

on investments discussed below, including both credit and equity investments, and $0.28 was due to the under-earning of the dividend.”

“Our total $1.126 billion portfolio was

marked down $15.2 million during the quarter, including net depreciation of $18.3 million in the non-CLO core portfolio, partially offset

by a write-up of $2.9 million in the JV and $0.3 million in the BB and BBB CLO debt portfolio. Of the non-CLO core portfolio depreciation,

Pepper Palace, which has been written down to zero ($3.9 million), together with a handful of credits, primarily Exigo ($3.4 million)

and Chronus ($1.5 million), represented $9.9 million, or 54% of the total reduction, reflecting company performance adjustments, with

a further $6.0 million, or 33%, reflecting a broad market adjustment to comparable market multiples across many industries on equity positions

held at or above cost, and the remaining 13% reflecting the impact of changes in market spreads across valuations. As of quarter-end,

our core non-CLO portfolio was 0.2% below cost, for a total portfolio valuation at 3.6% below cost. This quarter’s results reflect

a combination of portfolio company performance and market impacts on our overall portfolio, with both Pepper Palace, now carried at zero,

and Exigo, carried at $17.3 million or 70% of its own total cost, on red watchlist status, indicating potential risk of loss of capital.”

“During the quarter, our core BDC net interest

margin increased from $13.0 million last quarter to $13.4 million. The average core assets increase of 4.8% was offset by (i) the average

SOFR rate used in the portfolio decreasing by 5 basis points from last quarter, (ii) spreads on originations this quarter being almost

50 basis points lower than on the repayments they replaced, and (iii) the relative timing of this quarter’s originations and repayments.”

“Our quarter-end cash position increased

from $21.8 million last quarter to $60.8 million, available to be deployed accretively in investments.”

“Our overall credit quality remained solid

this quarter, with 98.3% of credits rated in our highest internal category, a result we are proud of given the current headwinds in the

industry, as seen in this quarter’s markdowns. Two investments are now on non-accrual status, being one, Pepper Palace, which has

been on non-accrual status and fully written-off this quarter, and two, our CLO’s F-note, which was written off and placed on non-accrual

last quarter, together representing 0.0% of fair value and 1.2% of cost. With 81.7% of our investments at quarter-end in first lien debt

and generally supported by strong enterprise values and resilient balance sheets in industries that have historically performed well in

stressed situations, we believe our portfolio composition and leverage profile are well structured to handle a wide range of economic

conditions and uncertainty.”

Mr. Oberbeck concluded, “As we progress

through fiscal year 2027, the macroeconomic environment remains complex, shaped by geopolitical tensions, elevated inflation, and continued

concerns about AI and software. These dynamics, combined with an uncertain interest rate environment, have driven a measurable rise in

default rates and broad valuation pressure across the sector, with industry NAVs declining and a number of BDCs reducing their dividends

this past quarter. This quarter’s credit related NAV decline, discussed above, reflects credit specific situations and does not

appear indicative of a broader trend in our portfolio. The recent wave of BDC bond issuance, the rebound in higher-quality loan values,

and improving M&A activity point to a market that appears to be improving and differentiating among managers, and we are confident

that our disciplined, senior secured, first-lien focused underwriting and conservative balance sheet position Saratoga to navigate this

environment and continue delivering durable, risk-adjusted returns to our shareholders over the long term.”

Discussion of Financial Results for the

Quarter ended May 31, 2026:

● AUM at fair value as of May 31, 2026 was

$1.126 billion, an increase of 1.6% from $1.109 billion as of February 28, 2026, and an increase of 16.3% from $968.3 million as of May

31, 2025.

● Total

investment income for the three months ended May 31, 2026, was $30.8 million, a decrease

of $1.5 million, or 4.8%, from $32.3 million for the quarter ended May 31, 2025, and a decrease

of $0.3 million, or 1.1%, as compared to $31.1 million for the quarter ended February 28,

2026. This quarter’s investment income decrease, as compared to prior quarters, was

primarily due to lower interest earned on the period’s cash balances in addition to

lower interest earned on deployed capital than in prior quarters, partially offset by interest

income derived from increased AUM. Investment income reflects a weighted average interest

rate on the core BDC portfolio of 10.5%, down from 10.4% as of February 28, 2026 and

11.5% as of May 31, 2025, with the yield reduction primarily reflecting SOFR base rate

decreases over the past year, but also indicative of recent tight spreads experienced on

new originations versus historically higher spreads on repaid assets.

● Total

expenses for the quarter ended May 31, 2026, excluding interest and debt financing expenses,

base management fees and incentive fees, and income and excise taxes, were $2.7 million,

a decrease of $0.1 million compared to $2.8 million for the quarter ended May 31, 2025, and

an increase of $0.3 million as compared to $2.4 million for the quarter ended February 28,

2026. This represented 0.9% of average total assets on an annualized basis, up from 0.8%

both last quarter and last year.

● Adjusted

NII for the quarter ended May 31, 2026, was $7.6 million, a decrease of $2.5 million,

or 25.1%, from $10.1 million in the quarter ended May 31, 2025, and a decrease of $0.9 million,

or 11.0% from $8.5 million in the quarter ended February 28, 2026. The decrease from comparable

quarters, in addition to the abovementioned interest income and operating expense changes,

primarily reflects the full-period impact of the additional interest expense on the $50 million

7.25% private bond and the $100 million 7.5% public baby bond that was issued last quarter

used to repay the $175 million 4.375% institutional bond at the end of February 2026.

● NII

Yield as a percentage of average net asset value for the quarter ended May 31, 2026,

was 7.8%. Adjusted NII Yield was also 7.8%, as compared to adjusted NII Yield of 10.3% last

year, and 8.4% last quarter.

● NAV

was $378.5 million as of May 31, 2026, a decrease of $17.9 million from $396.4

million as of May 31, 2025, and a decrease of $17.7 million from $396.2 million as of

February 28, 2026.

● NAV

per share was $23.23 as of May 31, 2026, compared to $24.42 as of February

28, 2026, and $25.52 as of May 31, 2025.

● Return

on equity (“ROE”) for the last twelve months ended May 31, 2026, was

4.0%, down from 9.3% for the comparable period last year, and down from 9.1% for the twelve

months ended February 28, 2026. ROE on an annualized basis for the quarter ended May 31,

2026 was (7.1)%.

● The

weighted average common shares outstanding for the quarter ended May 31, 2026 was 16.3

million, up from 16.2 million shares last quarter and increasing from 15.3 million for the

quarter ended May 31, 2025.

Portfolio and Investment Activity for the

Quarter Ended May 31, 2026

● Fair

value of Saratoga Investment’s portfolio was $1.126 billion, excluding $60.8 million

in cash and cash equivalents, principally invested in 50 portfolio companies, one collateralized

loan obligation fund (the “CLO”), one joint venture fund (the “JV”),

and 30 distinct BB and BBB CLO debt investments.

● Cost

of investments made during the quarter ended May 31, 2026 were $79.2 million, including

two investments in new portfolio companies and ten follow-on investments.

● Principal

repayments during the quarter ended May 31, 2026, were $48.4 million, including one full

debt repayment, four partial repayments, plus amortization.

o For the quarter ended May 31, 2026, the fair value of the portfolio decreased by $15.0 million of

net realized gains and unrealized depreciation, consisting of (i) net unrealized depreciation of $18.3 million in the Non-CLO core portfolio

(ii) net unrealized appreciation of $3.2 million in the JV and BB/BBB CLO debt portfolio, and (iii) net realized gains of $0.2 million,

consisting of the receipt of an escrow payment on Netreo generating $0.6m realized gains, partially offset by the write-off of TG Pressure

Washing’s equity of $0.5 million.

o The $18.3 million unrealized depreciation in the non-CLO core portfolio consists of three different components:

● In

addition to Pepper Palace that was written down to zero, there are primarily two other assets

that showed signs of performance deterioration this quarter, being Exigo and Chronus, with

all performance assets combined representing $9.9 million, or 54% of the above write-down,

● There

was also a market adjustment to comparable market multiples for many of our industries, and

these have been reflected in the equity valuations of a group of assets in our portfolio

that had been trading at a premium to cost and post-markdown still remain above or close

to cost. This mark-down totals approx. $6.0 million, or 33% of the total write-down, and

● The

remaining 13% of the overall portfolio mark-down relates to the impact of recent market spreads

on our valuations.

o Since taking over management of the BDC in 2010, the Company has generated $1.37 billion of repayments

and sales of investments originated by Saratoga Investment, generating a gross unlevered IRR of 14.9%. Total investments originated by

Saratoga are $2.60 billion in 132 portfolio companies.

● The

overall portfolio composition consisted of 81.7% of first lien term loans, 3.8% of second

lien term loans, 1.4% of unsecured loans, 5.9% of structured finance securities, and 7.2%

of common equity.

● The

weighted average current yield on Saratoga Investment’s portfolio based on current

fair values was 9.8%, which was comprised of a weighted average current yield of 10.5% on

first lien term loans, 11.9% on second lien term loans, 11.2% on unsecured loans, 11.0% on

structured finance securities and 0.0% on equity interests.

Liquidity and Capital Resources

Outstanding Borrowings:

● On April 10, 2026, we issued $25.0 million in

aggregate principal amount of 7.25% fixed-rate notes due 2029 (the “7.25% 2029 Notes”) for net proceeds of approximately $24.5

million, based on an offering price of 98.00% per Note. Estimated offering costs incurred were approximately $0.2 million. Interest on

the 7.25% 2029 Notes is paid quarterly on February 28, May 31, August 31 and November 30 of each year, with the first payment made on

May 31, 2026. The Notes will mature on April 10, 2029, and may be extended to October 10, 2029, at Saratoga Investment’s sole discretion.

The Notes may be redeemed at our option, in whole or in part at any time, or from time to time on or after April 10, 2027, at the redemption

price of par, plus accrued and unpaid interest. Pursuant to the terms of the Notes Purchase Agreement, upon the mutual agreement of both

parties, we may issue additional Notes for sale in subsequent offerings up to a maximum of $25.0 million by July 10, 2026.

● As of May 31, 2026 Saratoga Investment had $817.4

million of borrowings outstanding, including $32.5 million under its $85.0 million senior secured revolving Valley Credit Facility and

$37.5 million under its $75.0 million senior secured revolving Live Oak Credit Facility.

● In addition, Saratoga Investment had $84.0 million

of SBA debentures in its SBIC II license outstanding, $129.0 million of SBA debentures in its SBIC III license outstanding, $369.4 million

of listed baby bonds issued, $75.0 million of unsecured unlisted institutional bond issuances, four unlisted private issuances of $90.0

million in total, and an aggregate of $60.8 million in cash and cash equivalents.

Undrawn Borrowing Capacity:

● With $90.0 million available under

the two credit facilities and $60.8 million of cash and cash equivalents as of May 31, 2026, Saratoga Investment has a total

of $150.8 million of undrawn credit facility borrowing capacity and cash and cash equivalents to be used for new investments

or to support existing portfolio companies in the BDC and the SBIC.

● In addition, Saratoga Investment has $46.0

million in undrawn SBA debentures available from its existing SBIC III license. And in May 2026, legislation amending the Small Business

Investment Act of 1958 increased the individual SBIC leverage limit from $175.0 million to $250.0 million, and the maximum leverage available

for two or more SBICs under common control from $350.0 million to $475.0 million, in each case subject to SBA approvals.

● Availability under the Valley National Bank and

Live Oak credit facilities can change depending on portfolio company performance and valuation. In addition, certain follow-on investments

in SBIC II and the BDC will not qualify for SBIC III funding.

● Total Saratoga Investment undrawn borrowing capacity

is therefore $196.8 million as of May 31, 2026.

● As of May 31, 2026, Saratoga Investment had

$120.1 million of committed undrawn lending commitments and $65.1 million of discretionary funding commitments.

Additionally:

● Saratoga Investment has an active equity distribution

agreement with Ladenburg Thalmann & Co. Inc., Raymond James and Associates, Inc, Lucid Capital Markets, LLC and Compass Point Research

and Trading, LLC, through which the Company may offer for sale, from time to time, up to $300.0 million of common stock through an ATM

offering.

o As of May 31, 2026, Saratoga Investment has sold 8,591,915 shares for gross proceeds of $227.2 million

at an average price of $26.42 for aggregate net proceeds of $225.4 million (net of transaction costs).

o During the three months ended May 31, 2026, Saratoga Investment did not sell any shares through its ATM

Program.

Dividend

On June 11, 2026, Saratoga Investment announced

that its Board of Directors declared a base quarterly dividend of $0.75 per share in aggregate for the second quarter of fiscal 2027,

declaring the following three monthly $0.25 per share dividends:

Month

Amount Per

Record Date

Payment Date

June 2026

$ 0.25

July 6, 2026

July 23, 2026

July 2026

$ 0.25

August 5, 2026

August 25, 2026

August 2026

$ 0.25

September 3, 2026

September 23, 2026

Shareholders have the option to receive payment

of dividends in cash or receive shares of common stock, pursuant to the Company’s DRIP. Shares issued under the Company’s

DRIP are issued at a 5% discount to the average market price per share at the close of trading on the ten trading days immediately preceding

(and including) the payment date.

The following table highlights Saratoga Investment’s

monthly dividend distribution for fiscal 2027 and annual distribution over the past four years:

Period (Fiscal Year ends Feb)

Base

Dividend

Per Share

Special

Dividend

Per Share

Total

Dividend

Per Share

Fiscal Q2 2027 (August 2026)

$ 0.25

Fiscal Q2 2027 (July 2026)

$ 0.25

Fiscal Q2 2027 (June 2026)

$ 0.25

Fiscal Q1 2027 (May 2026)

$ 0.25

Fiscal Q1 2027 (April 2026)

$ 0.25

Fiscal Q1 2027 (March 2026)

$ 0.25

Total Declared in Fiscal 2027 YTD

$ 1.50

Full Year Fiscal 2026

$ 3.00

$ 0.25

$ 3.25

Full Year Fiscal 2025

$ 2.96

$ 0.35

$ 3.31

Full Year Fiscal 2024

$ 2.86

Full Year Fiscal 2023

$ 2.44

Share Repurchase Plan

As of May 31, 2026, the Company purchased 1,037,698

shares of common stock, at the average price of $22.05 for approximately $22.9 million pursuant to its existing Share Repurchase Plan.

During the quarter ended May 31, 2026, the Company did not purchase any shares of common stock pursuant to the Share Repurchase Plan.

Previously, in fiscal year 2015, the Company announced

the approval of an open market share repurchase plan (the “Share Repurchase Plan”) that allows it to repurchase up to 200,000

shares of its common stock at prices below its NAV as reported in its then most recently published financial statements. Since then, the

Share Repurchase Plan has been extended annually, and the Company has periodically increased the amount of shares of common stock that

may be purchased under the Share Repurchase Plan, most recently to 1.7 million shares of common stock. On January 6, 2026, its Board of

Directors extended the Share Repurchase Plan for another year to January 15, 2027.

Fiscal First Quarter 2027 Conference Call/Webcast

Information

When:

Wednesday, July 8, 2026

10:00 a.m. Eastern Time (ET)

How:

Webcast: Interested parties may access a live webcast of the call and find the Q1 2027 presentation by going to the “Events & Presentations” section of Saratoga Investment’s investor relations website https://ir.saratogainvestmentcorp.com. A replay of the webcast will also be available for a limited time at Events & Presentations page.

Call:

To access the call by phone,

please go to this link Registration Link and you will be provided with dial in details. To avoid delays, we encourage participants

to dial into the conference call fifteen minutes ahead of the scheduled start time

About Saratoga Investment Corp.

Saratoga Investment is

a specialty finance company that provides customized financing solutions to U.S. middle-market businesses. The Company invests primarily

in senior and unitranche leveraged loans and mezzanine debt, and, to a lesser extent, equity to provide financing for change of ownership

transactions, strategic acquisitions, recapitalizations and growth initiatives in partnership with business owners, management teams and

financial sponsors. Saratoga Investment’s objective is to create attractive risk-adjusted returns by generating current income and

long-term capital appreciation from its debt and equity investments. Saratoga Investment has elected to be regulated as a business development

company under the Investment Company Act of 1940, as amended, and is externally managed by Saratoga Investment Advisors, LLC, an SEC-registered

investment advisor focusing on credit-driven strategies. Saratoga Investment Corp. owns two active SBIC-licensed subsidiaries, having

surrendered its first license after repaying all debentures for that fund following the end of its investment period and subsequent wind-down.

Furthermore, it manages a $360 million collateralized loan obligation (“CLO”) fund that is in wind-down and co-manages

a joint venture (“JV”) fund that owns a $400 million collateralized loan obligation (“JV CLO”) fund.

It also owns 52% of the Class F and 100% of the subordinated notes of the CLO, 87.5% of both the unsecured loans and membership interests

of the JV and 87.5% of the Class E-R notes of the JV CLO. The Company’s diverse funding sources, combined with a permanent capital

base, enable Saratoga Investment to provide a broad range of financing solutions.

Forward Looking Statements

This press release contains

historical information and forward-looking statements with respect to the business and investments of the Company, including, but not

limited to, the statements about future events or our future performance or financial condition. Forward-looking statements can be

identified by the use of forward looking words such as “outlook,” “believes,” “expects,” “potential,”

“continues,” “may,” “will,” “should,” “seeks,” “approximately,”

“predicts,” “intends,” “plans,” “estimates,” “anticipates” or negative versions

of those words, other comparable words or other statements that do not relate to historical or factual matters. The forward-looking statements

are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available

to us. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties.

Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including, but not

limited to: changes in the markets in which we invest; changes in the financial, capital, and lending markets; an economic downturn

or a recession and its impact on the ability of our portfolio companies to operate and the investment opportunities available to us; the

impact of interest rate volatility on our business and our portfolio companies; the uncertainty associated with the imposition of tariffs

and trade barriers and changes in trade policy and its impact on our portfolio companies and the global economy; the impact of supply

chain constraints and labor shortages on our portfolio companies; and the elevated levels of inflation and its impact on our portfolio

companies and the industries in which we invests, as well as those described from time to time in our filings with the Securities

and Exchange Commission.

Any forward-looking statement

speaks only as of the date on which it is made. The Company undertakes no duty to update any forward-looking statements made herein or

on the webcast/conference call, whether as a result of new information, future developments or otherwise, except as required by law. Readers

should not place undue reliance on any forward-looking statements and are encouraged to review the Company’s Annual Report on Form

10-K for the fiscal year ended February 28, 2026 and subsequent filings, including the “Risk Factors” sections therein, with

the Securities and Exchange Commission for a more complete discussion of the risks and other factors that could affect any forward-looking

statements.

Contacts:

Saratoga Investment Corporation

535 Madison Avenue, 4th Floor

New York, NY 10022

Henri Steenkamp

Chief Financial Officer

Saratoga Investment Corp.

212-906-7800

Lena Cati

The Equity Group Inc.

212-836-9611

Val Ferraro

The Equity Group Inc.

212-836-9633

Financials

Saratoga Investment Corp.

Consolidated Statements

of Assets and Liabilities

May 31,

2026

February 28,

2026

ASSETS

Investments at fair value

Non-control/Non-affiliate investments (amortized cost of $1,042,264,577 and $1,011,840,007, respectively)

$ 1,034,744,952

$ 1,016,247,566

Affiliate investments (amortized cost of $49,462,297 and $49,429,192, respectively)

50,325,404

52,710,911

Control investments (amortized cost of $77,038,261 and $75,118,675, respectively)

41,263,586

40,175,335

Total investments at fair value (amortized cost of $1,168,765,135 and $1,136,387,874, respectively)

1,126,333,942

1,109,133,812

Cash and cash equivalents

46,140,915

1,680,070

Cash and cash equivalents, reserve accounts

14,667,902

20,105,683

Interest receivable (net of reserve of $863,908 and $470,751, respectively)

9,048,860

7,314,053

Management fee receivable

232,837

249,720

Other assets

999,726

781,766

Total assets

$ 1,197,424,182

$ 1,139,265,104

LIABILITIES

Revolving credit facilities

$ 70,000,000

Deferred debt financing costs, revolving credit facilities

(1,453,760 )

(1,670,816 )

SBA debentures payable

213,000,000

160,000,000

Deferred debt financing costs, SBA debentures payable

(4,997,638 )

(3,888,087 )

4.35% Notes Payable 2027

75,000,000

Discount on 4.35% notes payable 2027

(74,697 )

(108,898 )

Deferred debt financing costs, 4.35% notes payable 2027

(257,587 )

(344,393 )

6.25% Notes Payable 2027

15,000,000

Deferred debt financing costs, 6.25% notes payable 2027

(112,867 )

(130,839 )

6.00% Notes Payable 2027

105,500,000

Discount on 6.00% notes payable 2027

(38,226 )

(48,361 )

Deferred debt financing costs, 6.00% notes payable 2027

(647,257 )

(823,774 )

8.00% Notes Payable 2027

46,000,000

Deferred debt financing costs, 8.00% notes payable 2027

(493,059 )

(580,514 )

8.125% Notes Payable 2027

60,375,000

Deferred debt financing costs, 8.125% notes payable 2027

(646,196 )

(748,873 )

8.50% Notes Payable 2028

57,500,000

Deferred debt financing costs, 8.50% notes payable 2028

(763,667 )

(866,230 )

7.25% Notes Payable 2029

25,000,000

Discount on 7.25% notes payable 2029

(480,024 )

Deferred debt financing costs, 7.25% notes payable 2029

(71,445 )

7.25% Notes Payable 2030

50,000,000

Discount on 7.25% notes payable 2030

(417,283 )

(435,318 )

Deferred debt financing costs, 7.25% notes payable 2030

(830,833 )

(775,165 )

7.50% Notes Payable 2031

100,000,000

Deferred debt financing costs, 7.50% notes payable 2031

(3,351,883 )

(3,298,905 )

Base management and incentive fees payable

6,862,113

6,602,819

Deferred tax liability

4,027,990

4,579,522

Accounts payable and accrued expenses

1,334,109

1,771,915

Interest and debt fees payable

3,405,852

3,904,143

Directors fees payable

5,500

Due to Manager

600,582

590,624

Total liabilities

818,969,224

743,109,350

Commitments and contingencies (See Note 9)

NET ASSETS

Common stock, par value $0.001, 100,000,000 common shares

authorized, 16,289,025 and 16,224,198 common shares issued and outstanding, respectively

16,289

16,224

Capital in excess of par value

440,588,956

439,202,477

Total distributable deficit

(62,150,287 )

(43,062,947 )

Total net assets

378,454,958

396,155,754

Total liabilities and net assets

$ 1,197,424,182

$ 1,139,265,104

NET ASSET VALUE PER SHARE

$ 23.23

$ 24.42

Asset Coverage Ratio

162.6 %

168.4 %

Saratoga Investment Corp.

Consolidated Statements of Operations

(unaudited)

For the three months ended

May 31,

2026

May 31,

2025

INVESTMENT INCOME

Interest from investments

Interest income:

Non-control/Non-affiliate investments

$ 26,005,778

$ 25,464,663

Affiliate investments

726,094

595,624

Control investments

686,716

1,190,661

Payment in kind interest income:

Non-control/Non-affiliate investments

173,291

168,229

Affiliate investments

503,610

584,749

Control investments

19,586

Total interest from investments

28,115,075

28,003,926

Interest from cash and cash equivalents

554,386

2,027,211

Management fee income

544,988

705,175

Dividend income:

Non-control/Non-affiliate investments

562,183

Control investments

778,852

436,418

Total dividend from investments

778,852

998,601

Structuring and advisory fee income

656,363

264,375

Other income

127,261

319,329

Total investment income

30,776,925

32,318,617

OPERATING EXPENSES

Interest and debt financing expenses

13,650,283

12,451,865

Base management fees

4,970,053

4,333,332

Incentive management fees expense (benefit)

1,892,061

2,536,513

Professional fees

531,236

699,200

Administrator expenses

1,350,000

1,250,000

Insurance

80,598

74,310

Directors fees and expenses

126,000

131,500

General and administrative

600,266

645,411

Income tax expense (benefit)

(16,559 )

54,454

Total operating expenses

23,183,938

22,176,585

NET INVESTMENT INCOME

7,592,987

10,142,032

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS

Net realized gain (loss) from investments:

Non-control/Non-affiliate investments

(488,148 )

2,262,984

Control investments

638,355

Net realized gain (loss) from investments

150,207

2,901,339

Net change in unrealized appreciation (depreciation) on investments:

Non-control/Non-affiliate investments

(11,927,184 )

372,148

Affiliate investments

(2,418,612 )

(45,944 )

Control investments

(831,335 )

617,773

Net change in unrealized appreciation (depreciation) on investments

(15,177,131 )

943,977

Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments

530,824

(55,085 )

Net realized and unrealized gain (loss) on investments

(14,496,100 )

3,790,231

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

$ (6,903,113 )

$ 13,932,263

WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE

$ (0.42 )

$ 0.91

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED

16,252,548

15,344,510

Supplemental Information Regarding Adjusted Net Investment Income,

Adjusted Net Investment Income Yield and Adjusted Net Investment Income per Share

On a supplemental basis, Saratoga Investment provides

information relating to adjusted net investment income, adjusted net investment income yield and adjusted net investment income per share,

which are non-GAAP measures. These measures are provided in addition to, but not as a substitute for, net investment income, net investment

income yield and net investment income per share, respectively. These non-GAAP measures should only be used to evaluate the Company’s

results of operations in conjunction with their corresponding GAAP measures. Adjusted net investment income represents net investment

income excluding any capital gains incentive fee expense or reversal attributable to realized and unrealized gains. The management agreement

with the Company’s advisor provides that a capital gains incentive fee is determined and paid annually with respect to cumulative

realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized losses

for such year. In addition, Saratoga Investment accrues, but does not pay, a capital gains incentive fee in connection with any unrealized

capital appreciation, as appropriate. All capital gains incentive fees are presented within net investment income within the Consolidated

Statements of Operations, but the associated realized and unrealized gains and losses that these incentive fees relate to, are excluded.

As such, Saratoga Investment believes that adjusted net investment income, adjusted net investment income yield and adjusted net investment

income per share is a useful indicator of operations exclusive of any capital gains incentive fee expense or reversal attributable to

gains. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial

results prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP

measures are not based on any comprehensive set of accounting rules or principles. Pursuant to the requirements of Item 10(e) of

Regulation S-K, the following table provides a reconciliation of net investment income to adjusted net investment income, net investment

income yield to adjusted net investment income yield and net investment income per share to adjusted net investment income per share for

the three months ended May 31, 2026 and 2025.

For the Three Months Ended

May 31,

2026

May 31,

2025

Net Investment Income

$ 7,592,987

$ 10,142,032

Changes in accrued capital gains incentive fee expense/ (reversal)

Adjusted net investment income

$ 7,592,987

$ 10,142,032

Net investment income yield

7.8 %

10.3 %

Changes in accrued capital gains incentive fee expense/ (reversal)

Adjusted net investment income yield (1)

7.8 %

10.3 %

Net investment income per share

$ 0.47

$ 0.66

Changes in accrued capital gains incentive fee expense/ (reversal)

Adjusted net investment income per share (2)

$ 0.47

$ 0.66

(1) Adjusted net investment income yield is calculated as adjusted net investment income divided by average

net asset value.

(2) Adjusted net investment income per share is calculated as adjusted net investment income divided by weighted

average common shares outstanding.

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