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Item 7. Management’s Discussion and Analysis

2026-05-05 compared with 2025-05-07 · 1592 added, 1035 removed, 988 unchanged (73% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction

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beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us.

beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or are

within our control.

If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from

those expressed in our forward-looking statements.

beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or

are within our control.

If a change occurs, our business, financial condition, liquidity and results of operations may vary materially

from those expressed in our forward-looking statements.

The forward-looking statements contained in this

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our future operating results;

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

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

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

the introduction, withdrawal, success and timing of

business initiatives and strategies;

changes in political, economic or industry conditions,

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

the relative and absolute investment performance and

operations of our Manager;

the impact of increased competition;

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

our ability to turn potential investment opportunities

into transactions and thereafter into completed and successful investments;

the unfavorable resolution of any future legal proceedings;

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

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

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

our contractual arrangements and relationships with third parties;

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

the ability of our portfolio companies to achieve their objectives;

our business prospects and the operational and financial

performance of our portfolio companies, including their ability to achieve our respective objectives as a result of the current economic

conditions caused by, among other things, elevated levels of inflation, and uncertainty relating to the interest rate environment,

and the effects of the disruptions caused thereby on our ability to continue to effectively manage our business;

interest rate volatility, including the uncertainty

relating to the interest rate environment, could adversely affect our results, particularly if we elect to use leverage as part of

our investment strategy;

the impact of investments that we expect to make and

future acquisitions and divestitures;

our contractual arrangements and relationships with

third parties;

the dependence of our future success on the general

economy and its impact on the industries in which we invest;

the ability of our portfolio companies to achieve their

our expected financings and investments;

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

our regulatory structure and tax treatment, including

our ability to operate as a business development company (“BDC”), or to operate our small business investment company

(“SBIC”) subsidiaries, and to continue to qualify to be taxed as a regulated investment company (“RIC”);

the adequacy of our cash resources and working capital;

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

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

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

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

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

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

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

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

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

the timing of cash flows, if any, from the operations

of our portfolio companies;

the impact of supply chain constraints and labor difficulties

on our portfolio companies and the global economy;

the elevated level of inflation, and its impact on

our portfolio companies and on the industries in which we invest;

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

the impact of geopolitical

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

the impact of legislative and regulatory actions and

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

the impact of changes to tax legislation and, generally,

our tax position;

our ability to access capital and any future financings

the ability of our Manager to attract and retain highly

talented professionals;

the ability of our Manager to locate suitable investments

for us and to monitor and effectively administer our investments.

Such forward-looking statements may include statements

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“should,” “will” and “would” or the negative of these terms or other comparable terminology.

We have based the forward-looking statements included

in this Annual Report on Form 10-K on information available to us on the date of this Annual Report on Form 10-K, and we assume no obligation

to update any such forward-looking statements.

Actual results could differ materially from those anticipated in our forward-looking statements,

and future results could differ materially from historical performance.

We undertake no obligation to revise or update any forward-looking

statements, whether as a result of new information, future events or otherwise, unless required by law or SEC rule or regulation.

are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with

Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, quarterly reports on Form

10-Q and current reports on Form 8-K.

We have based the forward-looking statements

included in this Annual Report on Form 10-K on information available to us on the date of this Annual Report on Form 10-K, and we assume

no obligation to update any such forward-looking statements.

Actual results could differ materially from those anticipated in our forward-looking

statements, and future results could differ materially from historical performance.

We undertake no obligation to revise or update any

forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law or SEC rule or

You are advised to consult any additional disclosures that we may make directly to you or through reports that we in the

future may file with the U.S.

Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, quarterly

reports on Form 10-Q and current reports on Form 8-K.

The following analysis of our financial condition

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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.

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.

Our investment objective

is to create attractive risk-adjusted returns by generating current income and long-term capital appreciation from our investments.

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.

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 qualified to be treated as a RIC under subchapter M of the Internal Revenue Code

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$350.0 million with at least $175.0 million in combined regulatory capital.

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, and

extended its legal maturity to April 2033, and added a non-call period ending 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 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.

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, and extended its legal maturity to April 2033, and added a non-call period ending 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 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.

August 31, 2021, the outstanding receivable of $2.6 million was repaid.

On June 10, 2024, the Company completed its fifth

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2024 Reset CLO Notes”), consisting of Class A-1-R-4 and Class A-2-R-4.

The 2013-1 2024 Reset CLO Notes were issued pursuant to the

Indenture with the same Trustee.

Proceeds of the issuance of the 2013-1 2024 Reset CLO Notes were used along with existing assets of the

Saratoga CLO to redeem the existing Class A-1-R-3 and Class A-2-R-3 Notes.

The 2013-1 2024 Reset CLO Notes were issued pursuant to

the Indenture with the same Trustee.

Proceeds of the issuance of the 2013-1 2024 Reset CLO Notes were used along with existing assets

of the Saratoga CLO to redeem the existing Class A-1-R-3 and Class A-2-R-3 Notes.

No other Notes were refinanced as part of this refinancing.

The Saratoga CLO paid $0.5 million of transaction costs related to the refinancing.

We have formed a wholly owned special purpose

entity, Saratoga Investment Funding II LLC, a Delaware limited liability company (“SIF II”), for the purpose of entering into

a $50.0 million senior secured revolving credit facility with Encina Lender Finance, LLC (“Encina”), supported by loans held

by SIF II and pledged to Encina under the credit facility (the “Encina Credit Facility).

The Encina Credit Facility closed on October

During the first two years following the closing date, SIF II may request an increase in the commitment amount under the Encina

Credit Facility to up to $75.0 million.

The terms of the Encina Credit Facility require a minimum drawn amount of $12.5 million at all

times during the first six months following the closing date, which increases to the greater of $25.0 million or 50% of the commitment

amount in effect at any time thereafter.

The term of the Encina Credit Facility is three years.

Advances under the Encina Credit Facility

bear interest at a floating rate per annum equal to LIBOR plus 4.0%, with LIBOR having a floor of 0.75%, with customary provisions related

to our and Encina’s selection of a replacement benchmark rate.

Concurrently with the closing of the Encina Credit Facility, all

remaining amounts outstanding on our existing revolving credit facility with Madison Capital Funding, LLC were repaid and the facility

was terminated.

On January 27, 2023, among other things, the borrowings available under the Encina Credit Facility was increased from

up to $50.0 million to up to $65.0 million, the underlying benchmark rate used to compute interest changed from LIBOR to Term SOFR for

one-month tenor plus a 0.10% credit spread adjustment;

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

and the maturity date was extended from October 4, 2024 to January 27, 2026.

We have utilized a wholly owned special purpose

entity, Saratoga Investment Funding II LLC, a Delaware limited liability company (“SIF II”), for the purpose of entering

into a $85.0 million senior secured revolving credit facility with Valley National Bank (“Valley”), supported by loans held

by SIF II and pledged to Valley under the credit facility (the “Valley Credit Facility).

The Valley Credit Facility closed on November

The terms of the Valley Credit Facility require a minimum drawn amount equal to the greater of $25.0 million or 38%

of the facility amount in effect at such time.

The term of the Valley Credit Facility is three years.

Advances under the Valley Credit

Facility bear interest at a floating rate per annum equal to Term SOFR plus an applicable margin of 2.85%, with a SOFR Floor of 1.00%.

Concurrently with the closing of the Valley Credit Facility, all remaining amounts outstanding on our existing revolving credit facility

with Encina Lender Finance, LLC were repaid and the facility was terminated.

We have formed a wholly owned special purpose

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under the Live Oak Credit Facility to up to $150.0 million.

The terms of the Live Oak Credit Facility require a minimum drawn amount of

$12.5 million at all times during the period ending March 27, 2025, which increases to the greater of $25.0 million or 50% of the facility

amount in effect at any time thereafter.

The terms of the Live Oak Credit Facility require a minimum drawn amount

of $12.5 million at all times during the period ending March 27, 2025, which increases to the greater of $25.0 million or 50% of the

facility amount in effect at any time thereafter.

The term of the Live Oak Credit Facility is three years.

Advances under the Live Oak Credit Facility

bear interest at a floating rate per annum equal to Adjusted Term SOFR plus an applicable margin between 3.50% and 4.25% based on the

Live Oak Credit Facility’s utilization.

On June 14, 2024, the Live Oak Credit Facility was amended to, among other things:

(i) increase the borrowings available under the Live Oak Credit Facility from up to $50.0 million to up to $75.0 million, subject to a

borrowing base requirement;

Advances under the Live Oak

Credit Facility bear interest at a floating rate per annum equal to Adjusted Term SOFR plus an applicable margin between 3.50% and 4.25%

based on the Live Oak Credit Facility’s utilization.

On June 14, 2024, the Live Oak Credit Facility was amended to, among

other things:

(i) increase the borrowings available under the Live Oak Credit Facility from up to $50.0 million to up to $75.0 million,

subject to a borrowing base requirement;

(ii) add new lenders to the Live Oak Credit Agreement;

(iii) replace administrative agent approval with “Required

Lender” (as defined in the Live Oak Credit Agreement) approval with respect to certain matters;

(iv) replace Required Lender approval

with 100% lender approval with respect to certain matters;

and (v) change the definition of Required Lender to require the approval of

at least two unaffiliated lenders.

(iii) replace administrative agent approval

with “Required Lender” (as defined in the Live Oak Credit Agreement) approval with respect to certain matters;

Required Lender approval with 100% lender approval with respect to certain matters;

and (v) change the definition of Required Lender

to require the approval of at least two unaffiliated lenders.

On October 26, 2021, we entered into a Limited

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SLF JV is invested in Saratoga Investment Corp Senior Loan Fund 2021-1 Ltd (“SLF 2021”), which is a wholly owned subsidiary

SLF 2021 was formed for the purpose of making investments in a diversified portfolio of broadly syndicated first lien and second

lien term loans or bonds in the primary and secondary markets.

SLF 2021 was formed for the purpose of making investments in a diversified portfolio of broadly syndicated first lien and

second lien term loans or bonds in the primary and secondary markets.

On September 30, 2022, SLF 2021 was renamed to

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Accordingly, we do not consolidate SLF JV.

On October 28, 2022, SLF 2022 issued $402.1 million

of debt through the JV CLO trust.

The 2022 JV CLO Notes were issued pursuant to the JV Indenture, with the Trustee.

As part of the transaction,

we purchased 87.50% of the Class E Notes from SLF 2022 with a par value of $12.25 million.

As of February 28, 2025 and February 29, 2024,

the fair value of these Class E Notes were $12.3 million and $12.3 million, respectively.

On September 24, 2025, the Company 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, 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 of SLF JV.

As of February 28, 2026, the fair value of the Class E-R Notes was $8.4 million.

Critical Accounting Policies and Estimates

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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

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.

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.

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quarter when valuing investments for which market quotations are not readily available, as described below:

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

an independent valuation firm engaged by our board of directors independently reviews a selection of these preliminary valuations each quarter so that the valuation of each investment for which market quotes are not readily available is reviewed by the independent valuation firm at least once each fiscal year.

We use a third-party independent valuation firm to value our investment in the subordinated notes of Saratoga CLO and the Class F-2-R-3 Notes tranche of the Saratoga CLO every quarter.

each investment is initially

valued by the responsible investment professionals of Saratoga Investment Advisors and preliminary valuation conclusions are documented

and discussed with our senior management;

an independent valuation firm

engaged by our board of directors independently reviews a selection of these preliminary valuations each quarter so that the valuation

of each investment for which market quotes are not readily available is reviewed by the independent valuation firm at least once

each fiscal year.

We use a third-party independent valuation firm to value our investment in the subordinated notes of Saratoga CLO

and the Class F-2-R-3 Notes tranche of the Saratoga CLO every quarter.

In addition, all our investments are subject to the following

valuation process:

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

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

Our investment in Saratoga CLO is carried at fair

value, which is based on a discounted cash flows that utilizes prepayment, re-investment and loss assumptions based on historical experience

and projected performance, economic factors, the characteristics of the underlying cash flow, and market comparables for equity interests

in collateralized loan obligation funds similar to Saratoga CLO, when available, as determined by Saratoga Investment Advisors and recommended

to our board of directors.

Specifically, we use Intex cash flows, or an appropriate substitute, to form the basis for the valuation of

our investment in Saratoga CLO.

The cash flows use a set of inputs including projected default rates, recovery rates, reinvestment rates

and prepayment rates in order to arrive at estimated valuations.

The inputs are based on available market data and projections provided

by third parties as well as management estimates.

We use the output from the Intex models (i.e., the estimated cash flows) to perform

a discounted cash flow analysis on expected future cash flows to determine a valuation for our investment in Saratoga CLO.

the audit committee of our board of directors reviews

and approves each preliminary valuation and Saratoga Investment Advisors and an independent valuation firm (if applicable) will supplement

the preliminary valuation to reflect any comments provided by the audit committee;

our board of directors discusses the valuations and

approves the fair value of each investment, in good faith, based on the input of Saratoga Investment Advisors, independent valuation

firm (to the extent applicable) and the audit committee of our board of directors.

Our investment in Saratoga CLO is carried at

fair value, which is based on a discounted cash flows that utilizes prepayment, re-investment and loss assumptions based on historical

experience and projected performance, economic factors, the characteristics of the underlying cash flow, and market comparables for equity

interests in collateralized loan obligation funds similar to Saratoga CLO, when available, as determined by Saratoga Investment Advisors

and recommended to our board of directors.

Specifically, we use Intex cash flows, or an appropriate substitute, to form the basis for

the valuation of our investment in Saratoga CLO.

The cash flows use a set of inputs including projected default rates, recovery rates,

reinvestment rates and prepayment rates in order to arrive at estimated valuations.

The inputs are based on available market data and

projections provided by third parties as well as management estimates.

We use the output from the Intex models (i.e., the estimated cash

flows) to perform a discounted cash flow analysis on expected future cash flows to determine a valuation for our investment in Saratoga

The Company’s 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.

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.

Rule 2a-5 under the 1940 Act (“Rule 2a-5”)

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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.

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

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premium and accretion of discount, is recorded on an accrual basis to the extent that such amounts are expected to be collected.

stops accruing interest on its investments when it is determined that interest is no longer collectible.

Discounts and premiums on investments

purchased are accreted/amortized over the life of the respective investment using the effective yield method.

The amortized cost of investments

represents the original cost adjusted for the accretion of discounts and amortization of premiums on investments.

Company stops accruing interest on its investments when it is determined that interest is no longer collectible.

Discounts and premiums

on investments purchased are accreted/amortized over the life of the respective investment using the effective yield method.

The amortized

cost of investments represents the original cost adjusted for the accretion of discounts and amortization of premiums on investments.

Loans are generally placed on non-accrual status

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extent such amounts are expected to be collected.

We stop accruing PIK interest if we do not expect the issuer to be able to pay all principal

and interest when due.

We stop accruing PIK interest if we do not expect the issuer to be able to pay all

principal and interest when due.

We generate revenue in the form of interest income

and capital gains on the debt investments that we hold and capital gains, if any, on equity interests that we may acquire.

We expect our

debt investments, whether in the form of leveraged loans or mezzanine debt, to have terms of up to ten years, and to bear interest at

either a fixed or floating rate.

our debt investments, whether in the form of leveraged loans or mezzanine debt, to have terms of up to ten years, and to bear interest

at either a fixed or floating rate.

Interest on debt will be payable generally either quarterly or semi-annually.

In some cases, our debt

or preferred equity investments may provide for a portion or all of the interest to be PIK.

To the extent interest is PIK, it will be

payable through the increase of the principal amount of the obligation by the amount of interest due on the then-outstanding aggregate

In some cases, our

debt or preferred equity investments may provide for a portion or all of the interest to be PIK.

To the extent interest is PIK, it will

be payable through the increase of the principal amount of the obligation by the amount of interest due on the then-outstanding aggregate

principal amount of such obligation.

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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.

newly issued subordinated notes of the Saratoga CLO and also purchased $2.5 million in aggregate principal amount of the Class F-R-2

and $7.5 million aggregate principal amount of the Class G-R-2 notes tranches at par, with a coupon of 3M USD LIBOR plus 8.75% and 3M

USD LIBOR plus 10.00%, respectively.

As part of this refinancing, we also redeemed our existing $4.5 million aggregate amount of the

Class F notes tranche at par and the $20.0 million CLO 2013-1 Warehouse Loan was repaid.

On February 11, 2020, we entered into an unsecured

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$17.9 million Class F-R-3 Notes for $8.5 million Class F-1-R-3 Notes and $9.4 million Class F-2-R-3 Notes at par.

On August 11, 2021, we sold

our Class F-1-R-3 Notes to third parties, resulting in a realized loss of $0.1 million.

On August 11, 2021,

we sold our Class F-1-R-3 Notes to third parties, resulting in a realized loss of $0.1 million.

On June 10, 2024, we completed our fifth refinancing

of the Saratoga CLO, which adjusted the interest rate of two of the existing Notes.

Saratoga CLO issued $422.5 million notes (the “2013-1

2024 Reset CLO Notes”), consisting of Class A-1-R-4 and Class A-2-R-4.

The 2013-1 2024 Reset CLO Notes were issued pursuant to

the indenture with the same trustee.

Proceeds of the issuance of the 2013-1 2024 Reset CLO Notes were used along with existing assets

of the Saratoga CLO to redeem the existing Class A-1-R-3 and Class A-2-R-3 Notes.

No other Notes were refinanced as part of this refinancing.

The Saratoga CLO paid $0.5 million of transaction costs related to the refinancing.

The Saratoga CLO remains effectively 100% owned

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per annum of the outstanding principal amount of Saratoga CLO’s assets, paid quarterly to the extent of available proceeds.

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.

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.

Following the third refinancing and the issuance

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credit losses or asset pricing.

Changes in estimated yield are recognized as an adjustment to the estimated yield over the remaining life

of the investment from the date the estimated yield was changed.

Our primary operating expenses include the payment

of investment advisory and management fees, professional fees, directors and officers insurance, fees paid to directors who are not “interested

Changes in estimated yield are recognized as an adjustment to the estimated yield over the remaining

life of the investment from the date the estimated yield was changed.

Our primary operating expenses include the payment of investment advisory

and management fees, professional fees, directors’ and officers’ insurance, fees paid to directors who are not “interested

persons” (as defined in Section 2(a)(19) of the 1940 Act) of the Company (“independent directors”) and administrator

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organization;

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

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

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

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

calculating our net asset value (“NAV”)

(including the cost and expenses of any independent valuation firm);

expenses incurred by our Manager payable to third parties,

including agents, consultants or other advisers, in monitoring our financial and legal affairs and in monitoring our investments

and performing due diligence on our prospective portfolio companies;

expenses incurred by our Manager payable for travel

and due diligence on our prospective portfolio companies;

interest payable on debt, if any, incurred to finance

our investments;

offerings of our common stock and other securities;

investment advisory and management fees;

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

fees payable to third parties, including agents, consultants

or other advisers, relating to, or associated with, evaluating and making investments;

transfer agent and custodial fees;

federal and state registration fees;

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

all costs of registration and listing our common stock

on any securities exchange;

federal, state and local taxes;

independent directors’ fees and expenses;

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

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

costs of preparing and filing reports or other documents

required by governmental bodies (including the Securities and Exchange Commission (the “SEC”) and the SBA);

costs of any reports, proxy statements or other notices

to common stockholders including printing costs;

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

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

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

direct costs and expenses of administration, including

printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs;

administration fees and all other expenses incurred

by us or, if applicable, the administrator in connection with administering our business (including payments under the Administration

Agreement based upon our allocable portion of the administrator’s overhead in performing its obligations under an Administration

Agreement, including rent and the allocable portion of the cost of our officers and their respective staffs (including travel expenses)).

Pursuant to the investment advisory and management

agreement that we had with GSCP (NJ), L.P., our former investment adviser and administrator, we had agreed to pay GSCP (NJ), L.P.

as investment

adviser a quarterly base management fee of 1.75% of the average value of our total assets (other than cash or cash equivalents but including

assets purchased with borrowed funds) at the end of the two most recently completed fiscal quarters and an incentive fee.

investment adviser a quarterly base management fee of 1.75% of the average value of our total assets (other than cash or cash equivalents

but including assets purchased with borrowed funds) at the end of the two most recently completed fiscal quarters and an incentive fee.

The incentive fee had two parts:

A fee, payable quarterly in arrears, equal to 20.0% of our pre-incentive fee net investment income, expressed as a rate of return on the value of the net assets at the end of the immediately preceding quarter, that exceeded a 1.875% quarterly hurdle rate measured as of the end of each fiscal quarter.

Under this provision, in any fiscal quarter, our investment adviser received no incentive fee unless our pre-incentive fee net investment income exceeded the hurdle rate of 1.875%.

Amounts received as a return of capital were not included in calculating this portion of the incentive fee.

Since the hurdle rate was based on net assets, a return of less than the hurdle rate on total assets could still have resulted in an incentive fee.

A fee, payable at the end of each fiscal year, equal to 20.0% of our net realized capital gains, if any, computed net of all realized capital losses and unrealized capital depreciation, in each case on a cumulative basis on each investment in our portfolio, less the aggregate amount of capital gains incentive fees paid to the investment adviser through such date.

A fee, payable quarterly in arrears, equal to 20.0%

of our pre-incentive fee net investment income, expressed as a rate of return on the value of the net assets at the end of the immediately

preceding quarter, that exceeded a 1.875% quarterly hurdle rate measured as of the end of each fiscal quarter.

Under this provision,

in any fiscal quarter, our investment adviser received no incentive fee unless our pre-incentive fee net investment income exceeded

the hurdle rate of 1.875%.

Amounts received as a return of capital were not included in calculating this portion of the incentive

Since the hurdle rate was based on net assets, a return of less than the hurdle rate on total assets could still have resulted

in an incentive fee.

A fee, payable at the end of each fiscal year, equal

to 20.0% of our net realized capital gains, if any, computed net of all realized capital losses and unrealized capital depreciation,

in each case on a cumulative basis on each investment in our portfolio, less the aggregate amount of capital gains incentive fees

paid to the investment adviser through such date.

We deferred cash payment of any incentive fee

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distinctions in the fee terms:

The capital gains portion of the incentive fee was reset with respect to gains and losses from May 31, 2010, and therefore losses and gains incurred prior to such time will not be taken into account when calculating the capital gains fee payable to Saratoga Investment Advisors and, as a result, Saratoga Investment Advisors will be entitled to 20.0% of net gains that arise after May 31, 2010.

In addition, the cost basis for computing realized gains and losses on investments held by us as of May 31, 2010 equal the fair value of such investment as of such date.

Under the investment advisory and management agreement with our former investment adviser, GSCP (NJ), L.P., the capital gains fee was calculated from March 21, 2007, and the gains were substantially outweighed by losses.

Under the “catch up” provision, 100.0% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income that exceeds 1.875% but is less than or equal to 2.344% in any fiscal quarter is payable to Saratoga Investment Advisors.

This will enable Saratoga Investment Advisors to receive 20.0% of all net investment income as such amount approaches 2.344% in any quarter, and Saratoga Investment Advisors will receive 20.0% of any additional net investment income.

Under the investment advisory and management agreement with our former investment adviser, GSCP (NJ), L.P.

The capital gains portion of the incentive fee was

reset with respect to gains and losses from May 31, 2010, and therefore losses and gains incurred prior to such time will not be

taken into account when calculating the capital gains fee payable to Saratoga Investment Advisors and, as a result, Saratoga Investment

Advisors will be entitled to 20.0% of net gains that arise after May 31, 2010.

In addition, the cost basis for computing realized

gains and losses on investments held by us as of May 31, 2010 equal the fair value of such investment as of such date.

investment advisory and management agreement with our former investment adviser, GSCP (NJ), L.P., the capital gains fee was calculated

from March 21, 2007, and the gains were substantially outweighed by losses.

Under the “catch up” provision, 100.0%

of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income that

exceeds 1.875% but is less than or equal to 2.344% in any fiscal quarter is payable to Saratoga Investment Advisors.

This will enable

Saratoga Investment Advisors to receive 20.0% of all net investment income as such amount approaches 2.344% in any quarter, and Saratoga

Investment Advisors will receive 20.0% of any additional net investment income.

Under the investment advisory and management agreement

with our former investment adviser, GSCP (NJ), L.P.

only received 20.0% of the excess net investment income over 1.875%.

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

We will no longer have deferral rights regarding incentive

fees in the event that the distributions to stockholders and change in net assets is less than 7.5% for the preceding four fiscal

Capital Gains Incentive Fee

We record an expense accrual relating to the capital

gains incentive fee payable by us to the Manager when the unrealized gains on its investments exceed all realized capital losses on its

investments given the fact that a capital gains incentive fee would be owed to the Manager if we were to liquidate our investment portfolio

at such time.

The actual incentive fee payable to the Company’s 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.

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 Company’s Manager related to capital gains will be determined and

payable in arrears at the end of each fiscal year and will include only realized capital gains for the period.

Recent Accounting Pronouncements

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The amendments in this update require more disaggregated information on income taxes paid.

is effective for years beginning after December 15, 2024.

Early adoption is permitted, however the Company has not elected to early adopt

this provision as of the date of the financial statements contained in this report.

The Company is still assessing the impact of the new

is effective for annual reporting periods beginning after December 15, 2024.

We have adopted ASU 2023-09 effective as of February 28,

2026, and concluded that the application of this guidance did not have a material impact on our consolidated financial statements.

Note 6 in Item 8, Financial Statements and Supplementary Data , for further information.

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.

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

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The Company is currently evaluating the impact of the new standard

on the Company’s consolidated financial statements and related disclosures and does not believe it will have a material impact on its

consolidated financial statements or its disclosures.

on the Company’s consolidated financial statements and related disclosures and does not believe it will have a material impact

on its consolidated financial statements or its disclosures.

Portfolio and investment activity

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$ 11.2(1.2 )%

$ 26.1(3.0 )%

Fixed rate debt (weighted average current coupon)(3)

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$ 997.9(99.5 )%

Floating rate debt (weighted average current spread over LIBOR/SOFR)(3)(4)

Excludes our investment in the subordinated notes of Saratoga CLO.

At February 28, 2025, excludes our investment in the subordinated notes of Saratoga CLO and Class F-2-R-3 Notes tranche, as well as the unsecured notes and equity interests in the SLF JV and the Class E Note tranche of the SLF 2022.

At February 28, 2023, excludes our investment in the subordinated notes of Saratoga CLO, Class F-2-R-3 Note tranche, as well as the unsecured notes and equity interests in the SLF JV.

Excludes our investment in the subordinated notes of Saratoga CLO and equity interests, as well as the unsecured notes and equity interests in SLF JV and the Class E Note tranche of the SLF 2022.

Calculation uses either 1-month or 3-month LIBOR/SOFR,

depending on the contractual terms, and after factoring in any existing LIBOR/SOFR floors.

Our investment in the subordinated notes of Saratoga CLO and Class F-R-3 Note tranche, as well as the unsecured notes and equity interests in the SLF JV and the Class E note tranche of the SLF 2022 are included in Structured Finance Securities industry.

Floating rate debt (weighted average current spread over LIBOR)(3)(4)

(1) Excludes our investment in the subordinated notes

of Saratoga CLO, and our investments in BBB and BB CLO debt securities.

(2) Excludes our investment in the subordinated notes and F-2-R-3 Notes of Saratoga CLO, the unsecured

notes and equity interests in the SLF JV, Class E Notes and E-R Notes of SLF 2022, and our investments in BB and BBB CLO debt securities.

(3) Excludes our investment in the subordinated notes

of Saratoga CLO and equity interests, as well as the unsecured notes and equity interests

in SLF JV, Class E Notes and E-R Notes of the SLF 2022 and our investments in BB and BBB CLO

debt securities.

(4) Calculation uses either 1-month or 3-month LIBOR,

depending on the contractual terms, and after factoring in any existing LIBOR floors.

(5) Our investment in the subordinated notes of Saratoga

CLO and Class F-2-R-3 Note tranche, the unsecured notes and equity interests in the SLF JV,

the Class E Notes and E-R Notes of the SLF 2022 and our investments in BB and BBB CLO debt securities are included

in Structured Finance Securities industry.

During the fiscal year ended February 28, 2026,

we invested $309.5 million in new and existing portfolio companies and had $184.6 million in aggregate amount of exits and repayments,

resulting in net repayments of $144.0 million for the year.

including $180.0 million of proceeds from sales and repayments of debt and equity investments in the current period and $4.6 million of

additional proceeds from sales of equity investments realized in a prior period, resulting in net investments of $124.9 million for the

During the fiscal year ended February 28, 2025,

we invested $246.1 million in new and existing portfolio companies and had $30.3 million in aggregate amount of exits and repayments resulting

in net investments of $215.8 million for the year.

we invested $168.1 million in new and existing portfolio companies and had $312.1 million in aggregate amount of exits and repayments

resulting in net repayments of $144.0 million for the year.

During the fiscal year ended February 29, 2024,

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Portfolio Composition

Our portfolio composition at February 28, 2025, February

29, 2024 and February 28, 2023 at fair value was as follows:

Our portfolio composition

at February 28, 2026, February 28, 2025 and February 29, 2024 at fair value was as follows:

February 28, 2026

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February 29, 2024

Percentage of Total Portfolio

Weighted Average Current Yield

Percentage of Total Portfolio

Weighted Average Current Yield

Percentage of Total Portfolio

Weighted Average Current Yield

First lien term loans

Second lien term loans

Unsecured loans

Unsecured term loans

Structured finance securities

Equity interests

At February 28, 2025, our investment in the

subordinated notes of Saratoga CLO, a collateralized loan obligation fund, had a fair value of $0.2 million and constituted 0.02% of

our portfolio.

This investment constitutes a first loss position in a portfolio that, as of February 28, 2025 and February 29, 2024,

was composed of $527.1 million and $640.8 million, respectively, in aggregate principal amount of primarily senior secured first

lien term loans.

In addition, as of February 28, 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.

At February 28, 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 February 28, 2026 and February 28, 2025, was composed of

$391.0 million and $527.1 million, respectively, in aggregate principal amount of primarily senior secured first lien term loans.

as of February 28, 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.

This investment is subject to unique risks.

“Risk Factors—Our investment in Saratoga CLO constitutes a leveraged investment in a portfolio of subordinated

notes representing the lowest-rated securities issued by a pool of predominantly senior secured first lien term loans and is subject to

additional risks and volatility.

All losses in the pool of loans will be borne by our subordinated notes and only after the value of our

subordinated notes is reduced to zero will the higher-rated notes issued by the pool bear any losses”).

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 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.

At February 29, 2024, $603.0 million or 99.2% of the Saratoga CLO portfolio investments in terms of market value

had a CMR color rating of green or yellow and two of the Saratoga CLO portfolio investments were in default with a fair value of $0.3

For more information relating to Saratoga CLO, see the audited financial statements for Saratoga CLO included elsewhere herein.

Saratoga Investment Advisors normally grades all

of our investments using a credit and monitoring rating system (“CMR”).

notes representing the lowest-rated securities issued by a pool of predominantly senior secured first lien term loans and is subject

to additional risks and volatility.

All losses in the pool of loans will be borne by our subordinated notes and only after the value

of our subordinated notes is reduced to zero will the higher-rated notes issued by the pool bear any losses”).

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 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.

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 Saratoga CLO, see the audited financial statements for Saratoga CLO included elsewhere herein.

Saratoga Investment Advisors normally grades

all of our investments using a credit and monitoring rating system (“CMR”).

The CMR consists of a single component:

a color rating.

The color rating is based on several criteria, including financial and operating strength, probability of default, and restructuring risk.

The color rating is based on several criteria, including financial and operating strength, probability of default, and restructuring

The color ratings are characterized as follows:

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Portfolio CMR distribution

The CMR distribution of our investments at February 28, 2025

and February 29, 2024 was as follows:

The CMR distribution of our investments at February 28, 2026 and February

28, 2025 was as follows:

Saratoga Investment Corp.

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February 28, 2025

Investments at Fair Value

Percentage of Total Portfolio

Investments at Fair Value

Percentage of Total Portfolio

($ in thousands)

(1) Comprised of our investment in the subordinated notes of Saratoga

CLO and equity interests.

(1) Comprised of our investment in the subordinated notes

of Saratoga CLO, equity interests, and our investments in BB and BBB CLO debt securities.

The change in reserve from $0.2 million as of

February 29, 2024 to $0.2 million as of February 28, 2025 was primarily related to the reversal and receipt of the non-accrual of interest

income related to our investment in Knowland Group, and the write-down of all reserved interest income related to our investments in Pepper

Palace and Zollege as part of their restructurings this year.

February 28, 2025 to $0.5 million as of February 28, 2026 was primarily related to the non-accrual of interest income related to our

investments in Pepper Palace, Inc.

and Class F-2-R-3 Notes of the Saratoga CLO.

The CMR distribution of Saratoga CLO investments at February 28, 2026

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February 28, 2025

Investments at Fair Value

Percentage of Total Portfolio

Investments at Fair Value

Percentage of Total Portfolio

($ in thousands)

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

Portfolio composition by industry grouping at fair

The following table shows our portfolio composition by industry

grouping at fair value at February 28, 2025 and February 29, 2024:

Portfolio composition

by industry grouping at fair value

The following table shows our portfolio composition by industry grouping

at fair value at February 28, 2026 and February 28, 2025:

Saratoga Investment Corp.

1 unchanged sentence

February 28, 2025

Investments At Fair Value

Percentage of Total Portfolio

($ in thousands)

Healthcare Services

Structured Finance Securities(1)

Consumer Services

HVAC Services and Sales

Real Estate Services

HVAC Services and Sales

Healthcare Software

Education Software

Dental Practice Management

Mental Healthcare Services

Cutsom Millwork Software

Municipal Government Software

Health/Fitness Franchisor

Custom Millwork Software

Research Software

Education Services

Talent Acquisition Software

Employee Collaboration Software

Surgical Benefits Management

Municipal Government Software

Dental Practice Management

Financial Services

Research Software

Education Software

Revenue Cycle Management & Related Services

Talent Acquisition Software

Health/Fitness Franchisor

Architecture & Engineering Software

Association Management Software

Direct Selling Software

Mentoring Software

Insurance Software

Investment Fund

Marketing Orchestration Software

Property Operations Management Software

Mentoring Software

Corporate Education Software

Non-profit Services

Structured Finance Securities(1)

Direct Selling Software

Fire Inspection Business Software

Marketing Orchestration Software

Veterinary Services

Field Service Management

Lead Management Software

Alternative Investment Management Software

Fire Inspection Business Software

Financial Services Software

Volunteer Program Management Software

Supply Chain Planning Software

Industrial Products

HVAC Monitoring Devices

Product Compliance Software

Office Supplies

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Specialty Food Retailer

Healthcare Supply

Facilities Maintenance

Hospitality/Hotel

Sports Management

Legal Software

Roofing Contractor Software

(1) As of February 28, 2025, comprised of our investment in the subordinated

notes and F-2-R-3 Notes of Saratoga CLO, as well as the unsecured notes and equity interests in the SLF JV and E-Notes of SLF 2022.

of February 29, 2024, comprised of our investment in the subordinated notes and Class F-2-R-3 Notes of Saratoga CLO, as well as the unsecured

notes and equity interests in the SLF JV and E-Notes of SLF 2022.

The following table shows Saratoga CLO’s portfolio

composition by industry grouping at fair value at February 28, 2025 and February 29, 2024:

Association Management Software

Physician Compensation Management Software

Mental Healthcare Services

Investment Fund

Non-profit Services

Field Service Management

Lead Management Software

Financial Services Software

As of February 28, 2026 and

February 28, 2025, the foregoing comprised of our investment in the subordinated notes and F-2-R-3 Notes of Saratoga CLO, the

unsecured notes and equity interests in the SLF JV, Class E Notes and E-R Notes of the SLF 2022, and our investments in BB and BBB CLO debt securities.

The following table shows Saratoga CLO’s portfolio composition

by industry grouping at fair value at February 28, 2026 and February 28, 2025:

February 28, 2026

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High Tech Industries

Healthcare & Pharmaceuticals

Chemicals, Plastics, & Rubber

Telecommunications

Advertising, Printing & Publishing

Healthcare & Pharmaceuticals

Hotel, Gaming & Leisure

Consumer goods:

Containers, Packaging & Glass

Construction & Building

Advertising, Printing & Publishing

Telecommunications

Beverage, Food & Tobacco

Consumer goods:

Aerospace & Defense

Construction & Building

Transportation:

Broadcasting & Subscription

Diversified & Production

Containers, Packaging & Glass

Capital Equipment

Diversified & Production

Forest Products & Paper

Transportation:

Environmental Industries

Aerospace & Defense

Metals & Mining

Portfolio composition by geographic location at fair

Environmental Industries

composition by geographic location at fair value

The following table shows our portfolio composition by geographic

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February 28, 2025

Investments at

Percentage of

Investments at

Percentage of

Total Portfolio

($ in thousands)

International / Other

(1) As of February 28, 2025, comprised of our investments in the

subordinated notes, F-2-R-3 Notes of Saratoga CLO, as well as the unsecured notes and equity interests in the SLF JV and foreign investments.

As of February 29, 2024, comprised of our investments in the subordinated notes, F-2-R-3 Notes of Saratoga CLO, as well as the unsecured

notes and equity interests in the SLF JV and foreign investments.

International

As of February 28, 2026, comprised of our investment in the subordinated notes, F-2-R-3 Notes of Saratoga CLO, the unsecured notes and equity interests in the SLF JV, Class E Notes and E-R Notes of SLF 2022, foreign investments and our investments in BB and BBB CLO debt securities.

Results of operations

Operating results for the fiscal years ended February 28,

2025, February 29, 2024 and February 28, 2023 were as follows:

Operating results for the fiscal years ended February 28, 2026, February

28, 2025 and February 29, 2024 were as follows:

For the Year Ended

February 28, 2026

February 28, 2025

February 29, 2024

($ in thousands)

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Income tax (provision) benefit from realized gain on investments

Net change in unrealized appreciation (depreciation) on investments

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

Net change in unrealized appreciation (depreciation) on

Net change in provision for deferred

taxes on unrealized (appreciation) depreciation on investments

Loss on extinguishment of debt*

Net increase in net assets resulting from operations

* Certain prior period amounts have been reclassified to conform

to current period presentation.

Net increase in net assets resulting

from operations

* Certain prior period amounts have been reclassified

to conform to current period presentation.

Investment income

The composition of our investment income for the fiscal years

ended February 28, 2025, February 29, 2024 and February 28, 2023 were as follows:

The composition of our investment income for the fiscal years ended

February 28, 2026, February 28, 2025 and February 29, 2024 were as follows:

For the Year Ended

February 28, 2026

February 28, 2025

February 29, 2024

($ in thousands)

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Total investment income

* Certain prior period amounts have been reclassified to conform

to current period presentation.

For the fiscal year ended February 28, 2025, total

investment income increased $5.1 million, or 3.6%, to $148.9 million for the fiscal year ended February 28, 2025 compared to $143.7 million

for the fiscal year ended February 29, 2024.

Interest income from investments increased $3.2 million, or 2.5%, to $131.0 million for the

year ended February 28, 2025 from $127.8 million for the fiscal year ended February 29, 2024.

The increase in interest income for the

fiscal year ended February 28, 2025 is primarily due to the recognition of $8.2 million interest income related to our Knowland investment

that was previously on non-accrual and was fully repaid this year with all interest, offset by lower interest income on the overall portfolio

as the weighted average interest rate decreased from 11.4% as of February 29, 2024 to 10.8% as of February 28, 2025.

* Certain prior period amounts have been reclassified

to conform to current period presentation.

For the fiscal year ended February 28, 2026, total

investment income increased $44.6 million, or 45.0%, to $143.7 million for the fiscal year ended February 29, 2024 compared to $99.1 million

investment income decreased $23.2 million, or 15.6%, to $125.7 million compared to $148.9 million for the fiscal year ended February 28,

Interest income from investments decreased $24.1 million, or 18.4%, to $106.9 million for the year ended February 28, 2026 from

$131.0 million for the fiscal year ended February 28, 2025.

The decrease in interest income for the fiscal year ended February 28, 2026

is primarily attributable to (i) the non-recurrence of $7.9 million interest income related to our Knowland investment recognized last

year that was previously on non-accrual, (ii) decrease of our average investment portfolio by 2.8% from $1,042.6 million last year to

$1,013.4 million this year, and (iii) the decrease of the weighted average current yield on our core investments to 9.6% as of February

28, 2026, down from 10.8% at February 28, 2025, reflecting both the reduction in SOFR base rates during this period, as well as the tightening

of spreads in the middle market.

For the fiscal year ended February 28, 2025,

Interest income from investments increased $42.6 million, or 50.0%, to $127.8 million for

the year ended February 29, 2024 from $85.2 million for the fiscal year ended February 28, 2023.

The increase in interest income for the

fiscal year ended February 29, 2024 is primarily attributable to an increase of 17.1% in total investments to $1,138.8 million from $972.6

million in the prior period, as well as the increase in the weighted average current yield on investments of 11.4% compared to 10.7% in

the prior period.

total investment income increased $5.1 million, or 3.6%, to $148.9 million for the fiscal year ended February 28, 2025 compared to $143.7

million for the fiscal year ended February 29, 2024.

Interest income from investments increased $3.2 million, or 2.5%, to $131.0 million

for the year ended February 28, 2025 from $127.8 million for the fiscal year ended February 29, 2024.

The increase in interest income

for the fiscal year ended February 28, 2025 is primarily due to the recognition of $8.2 million interest income related to our Knowland

investment that was previously on non-accrual and was fully repaid this year with all interest, offset by lower interest income on the

overall portfolio as the weighted average interest rate decreased from 11.4% as of February 29, 2024 to 10.8% as of February 28, 2025.

For the fiscal year ended February 28, 2026 and

February 28, 2025, total PIK income was $2.9 million and $4.0 million, respectively.

This increase was primarily due to the recognition

of reserved Knowland PIK interest previously on non-accrual and fully repaid during this year.

This decrease was primarily due to the recognition

of reserved Knowland PIK interest recognized last year.

For the fiscal year ended February 28, 2025 and

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fee income was $2.6 million, $3.1 million and $3.3 million, respectively.

The reduction reflects the reduction of the asset levels in

the Saratoga CLO as it is currently in winddown mode.

For the fiscal year ended February 28, 2026, February

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Dividends received

is recorded in the consolidated statements of operations when earned, and the decrease primarily reflects the reduced $4.0 million of

dividend income received on the SLF JV as of February 28, 2025 compared to $5.9 million as of February 29, 2024.

For the fiscal year ended February 28, 2025, February

29, 2024 and February 28, 2023, total structuring and advisory fee income was $1.6 million, $2.1 million and $3.6 million, respectively.

is recorded in the consolidated statements of operations when earned.

For the fiscal year ended February 28, 2026,

February 28, 2025 and February 29, 2024, total structuring and advisory fee income was $2.2 million, $1.6 million and $2.1 million, respectively.

Structuring and advisory fee income represents fee income earned and received performing certain investment and advisory activities during

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Other income primarily includes

prepayment, amendment and redemption fees and is recorded in the consolidated statements of operations when earned.

Operating expenses

The composition of our operating expenses for the years ended

February 28, 2025, February 29, 2024 and February 28, 2023 were as follows:

prepayment, monitoring and amendment fees and is recorded in the consolidated statements of operations when earned.

The composition of our operating expenses for

the years ended February 28, 2026, February 28, 2025 and February 29, 2024 were as follows:

For the Year Ended

February 28, 2026

February 28, 2025

February 29, 2024

($ in thousands)

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For the year ended February 28, 2026, total operating

expenses increased $9.0 million, or 10.4%, to $95.9 million compared to $86.8 million for the year ended February 29, 2024.

expenses decreased $7.0 million, or 7.3%, to $88.9 million compared to $95.9 million for the year ended February 28, 2025.

ended February 28, 2025, total operating expenses increased $9.0 million, or 10.4%, to $95.9 million compared to $86.8 million for the

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For the year ended February 28, 2026, interest

and debt financing expenses decreased $2.8 million, or 5.2% compared to the year ended February 28, 2025.

The decrease is primarily attributable

to both the total average outstanding debt decreasing from $836.2 million for the year ended February 28, 2025 to $791.3 million for the

year ended February 28, 2026.

The weighted average interest rate on our outstanding indebtedness also decreased slightly from 5.56% to

5.55% for the same periods.

For the year ended February 28, 2025, interest

and debt financing expenses increased $2.9 million, or 5.9% compared to the year ended February 29, 2024.

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to 5.56% for the same periods.

For the year ended February 29, 2024, interest

and debt financing expenses increased $15.7 million, or 46.8% compared to the year ended February 28, 2023.

The increase is attributable

to both the total average outstanding debt increasing from $663.0 million for the year ended February 28, 2023 to $798.9 million for the

year ended February 29, 2024, as well as the weighted average interest rate on our outstanding indebtedness increasing from 4.48% to 5.46%

for the same periods.

The increase in total average outstanding debt and the weighted average interest rate was primarily due to the issuance

during the year ended February 29, 2024 of the higher-cost 8.75% 2025 Notes and 8.50% 2028 Notes.

At February 29, 2024 and February 28,

2023, the lower-cost SBA debentures represented 26.1% and 27.7% of overall debt, respectively.

The increase in total average outstanding debt and the weighted average interest rate was primarily due

to the issuance during the year ended February 28, 2025 of the higher-cost 8.75% 2025 Notes and 8.50% 2028 Notes.

At February 28, 2025

and February 29, 2024, the lower-cost SBA debentures represented 26.1% and 27.7% of overall debt, respectively.

For the year ended February 28, 2026, base management

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For the year ended February 28, 2025, base management

fees increased $2.8 million, or 17.0% compared to the fiscal year ended February 28, 2023.

The increase in base management fees is due

to the 17.0% increase in the average value of our total assets, less cash and cash equivalents, from $938.5 million as of February 28,

fees decreased $0.8 million, or 4.3% compared to the fiscal year ended February 29, 2024.

The decrease in base management fees is due

to the 4.3% decrease in the average value of our total assets, less cash and cash equivalents, from $1,097.8 million as of February 29,

2024 to $1,050.5 million as of February 28, 2025.

For the year ended February 28, 2026, incentive

fees increased $5.2 million, or 65.1% compared to the fiscal year ended February 29, 2024.

The incentive fee on income increased this

year from $13.0 million for the year ended February 29, 2024 to $13.2 million for the year ended February 28, 2025, reflecting the increased

operating performance of our debt investments during this period.

The incentive fees on capital gains increased from $(8.3) million benefit

for the fiscal year ended February 29, 2024 to $(5.9) million benefit for the fiscal year ended February 28, 2025, both reflecting the

incentive fee income and expense on net unrealized appreciation and depreciation recognized during both these periods, with the liability

floor capped at zero.

fees decreased $4.0 million, or 30.4% compared to the fiscal year ended February 28, 2025.

The incentive fee on income decreased this

year from $13.2 million for the year ended February 28, 2025 to $9.2 million for the year ended February 28, 2026, reflecting the decrease

in net investment income during this period.

The incentive fees on capital gains remained unchanged at $0.0 million for both the twelve

months ended February 28, 2026 and 2025, reflecting no incentive fee on net realized and unrealized depreciation recognized during both

these periods, with the liability floor capped at zero.

For the year ended February 28, 2025, incentive

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operating performance of our debt investments during this period.

The incentive fees on capital gains decreased from ($1.8) million benefit

The incentive fees on capital gains increased from $(8.3) million benefit

for the fiscal year ended February 29, 2024 to $(5.9) million benefit for the fiscal year ended February 28, 2025, both reflecting the

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fees increased $0.8 million, or 36.9% compared to the fiscal year ended February 28, 2025.

This increase is primarily due to inflationary

increases from vendors across accounting, legal and consulting fees across the Company, as well as the additional cost of performing a

Sarbanes Oxley audit this year with the Company becoming an accelerated filer.

This increase primarily reflects the growth

across accounting, legal and consulting fees in connection with an increase in our assets and legal entities, as well as inflationary

increases across these vendors.

For the year ended February 28, 2025, professional

fees decreased $0.05 million, or 2.5% compared to the fiscal year ended February 28, 2023.

This decrease primarily reflects the benefit

of scale and optimization of costs and vendors across accounting, legal and consulting fees across the Company.

For the year ended February 28, 2025, administrator

expenses increased $0.8 million, or 21.6% compared to the fiscal year ended February 29, 2024, which reflects an increase to the cap on

the payment or reimbursement of expenses by the Company from $4.3 million last year to $5.0 million, effective August 1, 2024.

fees increased $0.3 million, or 16.5% compared to the fiscal year ended February 29, 2024.

This increase is primarily due to inflationary

increases from vendors across accounting, legal and consulting fees across the Company.

For the year ended February 28, 2026, administrator expenses increased

$0.5 million, or 11.2% compared to the fiscal year ended February 28, 2025, which reflects an increase to the cap on the payment or reimbursement

of expenses by the Company from $5.0 million last year to $5.4 million, effective August 1, 2025

For the year ended February 28, 2025, administrator

expenses increased $0.7 million, or 22.5% compared to the fiscal year ended February 28, 2023, which reflects an increase to the cap on

the payment or reimbursement of expenses by the Company from $3.275 million last year to $ 4.3 million, effective August 1, 2023.

expenses increased $0.8 million, or 21.6% compared to the fiscal year ended February 29, 2024, which reflects an increase to the cap

on the payment or reimbursement of expenses by the Company from $4.3 million last year to $5.0 million, effective August 1, 2024.

For the fiscal years ended February 28, 2026,

February 28, 2025 and February 29, 2024, the average borrowings outstanding under the Credit Facilities was approximately $68.7 million,

$37.9 million and $26.3 million, respectively, and the average weighted average interest rate on the outstanding borrowing under the Credit

Facilities was 9.49%, 9.66% and 6.72%, respectively.

$33.1 million and $37.9 million, respectively, and the average weighted average interest rate on the outstanding borrowing under the

Credit Facilities was 8.20%, 9.49% and 9.66%, respectively.

For the fiscal years ended February 28, 2026,

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$202.5 million, respectively.

For the years ended February 28, 2025, February 29, 2024 and February 28, 2023, the weighted average interest rate

on the outstanding borrowings of the SBA debentures was 3.32%, 3.08% and 2.78%, respectively.

For the years ended February 28, 2026, February 28, 2025 and February 29, 2024, the weighted average interest

rate on the outstanding borrowings of the SBA debentures was 3.06%, 3.32% and 3.08%, respectively.

The weighted average dollar amount of our unsecured

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8.50% 2028 Notes

7.25% 2030 Notes

7.50% 2031 Notes

For the years ended February 28, 2026, February

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For the fiscal year ended February 28, 2026, we

had $312.1 million of sales, repayments, exits or restructurings resulting in $42.0 million of net realized losses.

had $184.6 million of sales, repayments, exits or restructurings resulting in $5.7 million of net realized gains.

The most significant

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Gross Proceeds

Axiom Parent Holdings, LLC

Equity Interests

HemaTerra Holdings Company, LLC

Equity Interests

Identity Automation Systems

Equity Interests

Netreo Holdings, LLC

Equity Interests

Roscoe Medical, Inc.

Equity Interests

The $2.1 million of net realized

gains was from the sale of the equity position in our Axiom Parent Holdings, LLC investment.

We received escrow payments

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

The $3.2 million of net realized

gains was from the sale of the equity position in our Identity Automation Systems investment.

The $0.5 million of net realized

losses was from the sale of the equity position in our Roscoe Medical, Inc.

For the fiscal year ended February 28, 2025,

we had $312.1 million of sales, repayments, exits or restructurings resulting in $42.0 million of net realized losses.

The most significant

realized gains and losses during the year ended February 28, 2025 were as follows (dollars in thousands):

Fiscal year ended February

Gross Proceeds

First Lien Term Loan & Equity Interests

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Equity Interests

Modern Campus (fka Destiny Solutions

Modern Campus (fka Destiny Solutions Inc.)

Limited Partner Interests

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the sale of the limited partner interests in our Modern Campus (fka Destiny Solutions Inc.) investment.

The $1.3 million of net realized gains was from the sale of the equity

interests in our Emily Street Enterprises, L.L.C.

For the fiscal year ended February 29, 2024, we

had $30.3 million of sales, repayments, exits or restructurings resulting in $0.2 million of net realized gains.

The $1.3 million of net realized gains was from

the sale of the equity interests in our Emily Street Enterprises, L.L.C.

For the fiscal year ended February 29, 2024,

we had $30.3 million of sales, repayments, exits or restructurings resulting in $0.2 million of net realized gains.

The most significant

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Gross Proceeds

Net Realized Gain (Loss)

PDDS Buyer, LLC

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of our investments in PPDS Buyer, LLC, Censis Technologies, Inc., Ohio Medical, LLC, GreyHeller LLC and Targus Holdings, Inc.

For the fiscal year ended February 28, 2023, we

had $222.2 million of sales, repayments, exits or restructurings resulting in $7.4 million of net realized loss.

The most significant

realized gains and losses during the year ended February 28, 2023 were as follows (dollars in thousands):

Fiscal year ended February 28, 2023

Gross Proceeds

Net Realized Gain

PDDS Buyer, LLC

Equity Interests

Ohio Medical, LLC

Equity Interests

Targus Holdings, Inc.

Equity Interests

Censis Technologies, Inc.

Equity Interests

Texas Teachers of Tomorrow, LLC

Equity Interests

V Rental Holdings LLC

Equity Interests

The $7.9 million of net realized gains was from

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For the year ended February 28, 2026, our investments

had a net change in unrealized depreciation of $5.2 million compared to a net change in unrealized appreciation of $19.0 million for the

year ended February 28, 2025.

The most significant cumulative changes in unrealized appreciation (depreciation) for the year ended February

28, 2026, were the following (dollars in thousands):

Fiscal year ended February

Total Unrealized Appreciation (Depreciation)

YTD Change in Unrealized Appreciation (Depreciation)

Saratoga Senior Loan Fund I JV, LLC

Unsecured Loan & Equity Interests

First Lien Term Loan, Revolving Credit Facility & Equity Interests

Saratoga Investment Corp.

CLO 2013-1, Ltd.

Class F-2-R-3 Note

First Lien Term Loan & Structured Finance Securities

Madison Logic, Inc.

First Lien Term Loan

First Lien Term Loan & Equity Interests

AgencyBloc, LLC

First Lien Term Loan & Equity Interests

Modis Dental Partners OpCo

First Lien Term Loan & Equity Interests

The $3.6 million net change in unrealized depreciation

in our investment in Saratoga Senior Loan Fund I JV, LLC was primarily driven by the impact of the performance of individual credits in

the portfolio.

The $3.2 million net change in unrealized depreciation

in our investment in Exigo, LLC was primarily driven by overall company performance.

The $2.3 million net change in unrealized depreciation

in our investment Saratoga Investment Corp.

CLO 2013-1, Ltd.

Class F-2-R-3 Note was driven by the impact of the performance of individual

credits in the CLO portfolio.

The $1.9 million net change in unrealized depreciation

in our investment in Madison Logic, Inc.

was primarily driven by overall company performance.

The $1.5 million net change in unrealized depreciation

in our investment in Chronus LLC was primarily driven by overall company performance.

The $8.0 million net change in unrealized appreciation

in our investment in Zollege PBC was primarily driven by improved company performance.

The $1.1 million net change in unrealized appreciation

in our investment in AgencyBloc LLC was primarily driven by strong financial portfolio company performance.

The $1.1 million net change in unrealized appreciation

in our investment in Modis Dental Partners OpCo was primarily driven by overall market conditions.

For the year ended February 28, 2025, our investments

had a net change in unrealized appreciation of $19.0 million compared to a net change in unrealized depreciation of $47.1 million for

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Total Unrealized Appreciation (Depreciation)

in Unrealized

(Depreciation)

YTD Change in

Appreciation (Depreciation)

Pepper Palace, Inc.

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Saratoga Investment Corp.

CLO 2013-1, Ltd.

Class F-2-R-3 Note

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Saratoga Investment Corp.

CLO 2013-1, Ltd.

Structured Finance Securities

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The $16.1 million net change in unrealized appreciation

in our investment in Zollege PBC was driven by the restructuring of the investment, resulting in a reversal of previously recognized unrealized

depreciation reclassified to realized loss.

in our investment in Zollege PBC was driven by the restructuring of the investment, resulting in a reversal of previously recognized

unrealized depreciation reclassified to realized loss.

The $6.6 million net change in unrealized depreciation

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the portfolio.

The $5.6 million of net change in unrealized depreciation

in our investment Artemis Wax Corp.

was driven by a decline in company performance, overall market conditions and capital structure changes.

The $5.0 million of net change in unrealized depreciation

in our investment ARC Health OpCo LLC was driven by declines in company performance and capital structure changes.

The $5.6 million of net change in unrealized

depreciation in our investment Artemis Wax Corp.

was driven by a decline in company performance, overall market conditions and capital

structure changes.

The $5.0 million of net change in unrealized

depreciation in our investment ARC Health OpCo LLC was driven by declines in company performance and capital structure changes.

The $3.8 million net change in unrealized appreciation

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in our investment in Granite Comfort, LP was driven by a decline in company performance.

The $1.2 million net change in unrealized

depreciation in our investment ETU Holdings, Inc.

was driven by a decline in company performance, overall market conditions and capital

structure changes.

The $1.2 million net change in unrealized depreciation

in our investment ETU Holdings, Inc.

was driven by a decline in company performance, overall market conditions and capital structure

The $1.2 million net change in unrealized appreciation

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Total Unrealized Appreciation (Depreciation)

in Unrealized

(Depreciation)

YTD Change in

Appreciation (Depreciation)

Pepper Palace, Inc.

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was driven by overall company performance.

For the year ended February 28, 2023, our investments

had a net change in unrealized depreciation of $15.2 million compared to a net change in unrealized appreciation of $17.0 million for

the year ended February 28, 2022.

The most significant cumulative changes in unrealized appreciation (depreciation) for the year ended

February 28, 2023, were the following (dollars in thousands):

Fiscal year ended February 28, 2023

(Depreciation)

in Unrealized

(Depreciation)

Pepper Palace, Inc.

First Lien Term Loan & Equity Interests

Artemis Wax Corp.

First Lien Term Loan & Equity Interests

Vector Controls Holding Co., LLC

First Lien Term Loan & Equity Interests

Axero Holdings, LLC

First Lien Term Loan & Equity Interests

Destiny Solutions Inc.

First Lien Term Loan & Equity Interests

Netreo Holdings, LLC

First Lien Term Loan & Equity Interests

PDDS Buyer, LLC

First Lien Term Loan & Equity Interests

Saratoga Investment Corp.

CLO 2013-1, Ltd.

Structured Finance Securities

Saratoga Senior Loan Fund I JV, LLC

Equity Interests

The $9.3 million net change in unrealized depreciation

in our investment in Pepper Palace, Inc.

was driven by overall company performance.

The $2.1 million net change in unrealized appreciation

in our investment in Artemis Wax Corp.

was driven by improved financial performance.

The $3.1 million net change in unrealized appreciation

in our investment in Vector Controls Holding Co., LLC was driven by improved financial performance.

The $2.0 million net change in unrealized appreciation

in our investment in Axero Holdings, LLC was driven by growth and overall strong financial performance.

The $1.3 million net change in unrealized appreciation

in our investment in Destiny Solutions Inc.

was driven by growth and overall strong financial performance.

The $1.2 million net change in unrealized depreciation

in our investment in Zollege PBC was driven by weakened financial performance.

The $2.4 million net change in unrealized depreciation

in our investment in Netreo Holdings, LLC was driven by increased leverage and slowing top line growth.

The $5.1 million net change in unrealized depreciation

in our investment in PDDS Buyer, LLC was driven by the sale of that investment, resulting in a reversal of previously recognized unrealized

appreciation reclassified to realized gains.

The $4.1 million net change in unrealized depreciation

in our investment in Saratoga Investment Corp.

CLO 2013-1 Ltd.

was driven by the increase in discount rates and overall market conditions.

The $3.4 million net change in unrealized depreciation

in our investment in Saratoga Senior Loan Fund I JV, LLC was driven by the increase in discount rates and overall market conditions.

Changes in net assets resulting from operations

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government securities and other high-quality debt investments that mature in one year or less,

draws of the Encina Credit Facility and the Live Oak Credit Facility, our continued access to the SBA debentures future borrowings and

draws of the Valley Credit Facility and the Live Oak Credit Facility, our continued access to the SBA debentures future borrowings and

future offerings of both private and public debt and equity securities.

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We may rely on the revenue procedure in future periods to satisfy our RIC distribution requirement.

Also, as a BDC, we generally are required to meet

a coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, to total senior securities,

Also, as a BDC, we generally are required to

meet a coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, to total senior securities,

which include all of our borrowings and any outstanding preferred stock, of at least 200%, reduced to 150% effective April 16, 2019 following

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as of February 28, 2025.

To fund growth in our investment portfolio in the future, we anticipate needing to raise additional capital from

various sources, including the equity markets and other public and private debt-related markets, which may or may not be available on

favorable terms, if at all.

To fund growth in our investment portfolio in the future, we anticipate needing to raise additional capital

from various sources, including the equity markets and other public and private debt-related markets, which may or may not be available

on favorable terms, if at all.

Consequently, we may not have the funds or the

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sell these investments when desired and, if we are required to sell these investments, we may realize significantly less than their recorded

Due to the diverse capital sources available to

us at this time, we believe we have adequate liquidity to support our near term capital requirements.

Due to the diverse capital sources available

to us at this time, we believe we have adequate liquidity to support our near term capital requirements.

Encina Credit Facility

Below is a summary of the terms of the Encina

Credit Facility.

Below is a summary of the terms of the senior

secured revolving credit facility we entered into with Encina Lender Finance, LLC on October 4, 2021 and as amended on January 27, 2023

(the “Encina Credit Facility” and the related credit agreement, the “Encina Credit Agreement”).

On November 6,

2025, the Company terminated in full (i) the Encina Credit Agreement, and (ii) the Equity Pledge Agreement, dated as of October 4, 2021

(the “Encina Equity Pledge Agreement”), by and between the Company and Encina, as collateral agent.

All outstanding obligations

The Encina Credit Agreement and the Encina Equity Pledge Agreement terminated upon the satisfaction of all obligations and

liabilities of SIF II and the Company to secured parties thereunder, including, without limitation, payments of principal and interest,

other fees, breakage costs and other amounts owing to the secured parties.

The Encina Credit Agreement

provided for borrowings up to $65.0 million (the “Encina Facility Amount”).

Availability .

We were able to draw up

to the lesser of (i) the Encina Facility Amount and (ii) the borrowing base.

The borrowing base is an amount equal to (i) the difference

of (A) the product of the applicable advance rate which varied from 50.0% to 75.0% depending on the type of loan asset (Defaulted Loans

being excluded in that they carry an advance rate of 0%) and the value, determined in accordance with the Encina Credit Facility (the

“Adjusted Borrowing Value”), of certain “eligible” loan assets pledged as security for the loan (the “Borrowing

Base Value”) and (B) the Excess Concentration Amount, as calculated in accordance with the Encina Credit Facility, plus (ii) any

amounts held in the Prefunding Account and, without duplication, Excess Cash held in the Collection Account, less (iii) the product of

(a) the amount of any undrawn funding commitments we have under any loan asset and (b) the Unfunded Exposure Haircut Percentage, and

less (iv) $100,000.

Each loan asset we held as of the date on which the Encina Credit Facility was closed was valued as of that date

and each loan asset that we acquire after such date will be valued at the lowest of its fair value, its face value (excluding accrued

interest) and the purchase price paid for such loan asset.

Adjustments to the value of a loan asset were made to reflect, among other

things and under certain circumstances, changes in its fair value, a default by the obligor on the loan asset, insolvency of the obligor,

acceleration of the loan asset, and certain modifications to the terms of the loan asset.

The Encina Credit Facility contained limitations

on the type of loan assets that were “eligible” to be included in the borrowing base and as to the concentration level of

certain categories of loan assets in the borrowing base such as restrictions on geographic and industry concentrations, asset size and

quality, payment frequency, status and terms, average life, and collateral interests.

In addition, if an asset was to remain an “eligible”

loan asset, we could not make changes to the payment, amortization, collateral and certain other terms of the loan assets without the

consent of the administrative agent that would either result in subordination of the loan asset or be materially adverse to the lenders.

The Encina Credit Facility required certain minimum

drawn amounts.

For the period beginning on the closing date and ending April 4, 2022, the minimum funding amount was $12.5 million.

the period beginning on April 5, 2022, the minimum funding amount was the greater of $25.0 million and 50% of the Encina Facility Amount

in effect from time to time.

The Encina Credit Facility

was secured by assets of SIF II, a wholly owned special purpose entity, and pledged to Encina under the Encina Credit Facility.

Interest Rate and Fees .

Under the Encina

Credit Facility, funds were borrowed from or through certain lenders at the greater of the prevailing LIBOR rate and 0.75%, plus an applicable

margin of 4.00%.

The Encina Credit Agreement included benchmark replacement provisions which permitted the Administrative Agent and the

borrower to select a replacement rate upon the unavailability of LIBOR.

In addition, we paid the lenders a commitment fee of 0.75% per

year (or 0.50% if the ratio of advances outstanding to aggregate commitments was greater than or equal to 50%) on the unused amount of

the Encina Credit Facility for the duration of the term of the Encina Credit Facility.

Accrued interest and commitment fees were payable

monthly in arrears.

We were also obligated to pay certain other fees to the lenders in connection with the closing of the Encina Credit

Collateral Tests .

It was a condition precedent

to any borrowing under the Encina Credit Facility that the principal amount outstanding under the Encina Credit Facility, after giving

effect to the proposed borrowings, not exceed the borrowing base (the “Borrowing Base Test”).

In addition to satisfying the

Borrowing Base Test, the following tests must also be satisfied (together with Borrowing Base Test, the “Collateral Tests”):

Interest Coverage Ratio.

The ratio (expressed

as a percentage) of interest collections with respect to pledged loan assets, less certain fees and expenses relating to the Encina

Credit Facility, to accrued interest and commitment fees payable to the lenders under the Encina Credit Facility for the last 6 payment

periods must equal at least 175.0%.

Overcollateralization Ratio.

The ratio (expressed

as a percentage) of the aggregate Adjusted Borrowing Value of “eligible” pledged loan assets plus the fair value of certain

ineligible pledged loan assets (in each case, subject to certain adjustments) to outstanding borrowings under the Encina Credit Facility

plus the Unfunded Exposure Amount must equal at least 200.0%.

The Encina Credit Facility also required payment

of outstanding borrowings or replacement of pledged loan assets upon our breach of our representation and warranty that pledged loan

assets included in the borrowing base were “eligible” loan assets.

Such ineligible collateral loans were excluded from the

calculation of the borrowing base and could have led to a Borrowing Base Deficiency, which could have been cured by effecting one or

more (or any combination thereof) of the following actions:

(A) deposit into or credit to the collection account cash and eligible investments,

(B) repay outstanding borrowings (together with certain costs and expenses), (C) sell or substitute loan assets in accordance with the

Encina Credit Facility, or (D) pledge additional loan assets as collateral.

Compliance with the Collateral Tests was also a condition

to the discretionary sale of pledged loan assets by us.

Priority of Payments .

The priority of

payments provisions of the Encina Credit Facility required, after payment of specified fees and expenses, that collections of interest

from the loan assets and, to the extent that these are insufficient, collections of principal from the loan assets, be applied on each

payment date to payment of outstanding borrowings if the Borrowing Base Test, the Overcollateralization Ratio and the Interest Coverage

Ratio would not otherwise be met.

Operating Expenses .

The priority of payments

provision of the Encina Credit Facility provided for the payment of certain of our operating expenses out of collections on interest

and principal in accordance with the priority established in such provision.

The operating expenses payable pursuant to the priority

of payment provisions was limited to $200,000 per annum.

Representations and Warranties;

Events of Default .

The Encina Credit Agreement contained customary representations and warranties, affirmative covenants, negative

covenants and events of default.

The Encina Credit Agreement did not contain grace periods for breach by us of any negative covenants

or of certain of the affirmative covenants, including, without limitation, those related to preservation of the existence and separateness

of the Company.

Other events of default under the Encina Credit Agreement include, among other things, the following:

our failure to maintain

an Interest Coverage Ratio of less than 175%;

our failure to maintain an Overcollateralization Ratio

of less than 200%;

the filing of certain ERISA or

tax liens on our assets or the equity holder;

failure by Specified Holders to collectively, directly

or indirectly, own and control at least 51% of the outstanding equity interests of Saratoga Investment Advisor, or (y) possess the

right to elect (through contract, ownership of voting securities or otherwise) at all times a majority of the board of directors

(or similar governing body) of Saratoga Investment Advisor and to direct the management policies and decisions of Saratoga Investment

Advisor, or (ii) the dissolution, termination or liquidation in whole or in part, transfer or other disposition, in each case, of

all or substantially all of the assets of, Saratoga Investment Advisor;

indictment or conviction of Saratoga Investment Advisors

or any “key person” for a felony offense, or any fraud, embezzlement or misappropriation of funds by Saratoga Investment

Advisors or any “key person” and, in the case of “key persons,” without a reputable, experienced individual

reasonably satisfactory to Encina Lender Finance appointed to replace such key person within 30 days;

resignation, termination, disability or death of a

“key person” or failure of any “key person” to provide active participation in Saratoga Investment Advisors’

daily activities, all without a reputable, experienced individual reasonably satisfactory to Encina Lender Finance appointed within

Fees and Expenses .

We paid certain fees

and reimbursed Encina for the aggregate amount of all documented, out-of-pocket costs and expenses, including the reasonable fees and

expenses of lawyers, incurred by Encina in connection with the Encina Credit Facility and the carrying out of any and all acts contemplated

thereunder up to and as of the date of closing.

These amounts totaled $1.4 million.

On January 27, 2023, we entered into the first

amendment to the Encina Credit Agreement which, among other things:

(i) increased the borrowings available under the Encina Credit Facility

from up to $50.0 million to up to $65.0 million;

(ii) changed the underlying benchmark used to compute interest under the Encina Credit

Agreement from LIBOR to Term SOFR for a one-month tenor plus a 0.10% credit spread adjustment;

(iii) increased the applicable effective

margin rate on borrowings from 4.00% to 4.25%;

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

the period during which the borrower may request one or more increases in the borrowings available under the Encina Credit

Facility (each such increase, a “Facility Increase”) from October 4, 2023 to January 27, 2025, and increased the maximum

borrowings available pursuant to the Encina Facility Increase from $75.0 million to $150.0 million;

(vi) revised the eligibility criteria

for eligible collateral loans to exclude certain industries in which an obligor or related guarantor may be involved;

and (vii) amended

the provisions permitting the borrower to request an extension in the Commitment Termination Date (as defined in the Encina Credit Agreement)

to allow requests to extend any applicable Commitment Termination Date, rather than a one-time request to extend the original Commitment

Termination Date, subject to a notice requirement.

As of February 28, 2026, we had no outstanding

borrowings under the Encina Credit Facility.

As of February 28, 2025, we had $32.5 million outstanding borrowings under the Encina Credit

Our borrowing base under the Encina Credit Facility at February 28, 2026 and February 28, 2025 was $0 million and $78.6 million,

respectively.

Live Oak Credit Facility

Below is a summary of the terms of the senior

secured revolving credit facility we entered into with Live Oak Banking Company on March 27, 2024.

We entered into the Credit

and Security Agreement (the “Encina Credit Agreement”) relating to the Encina Credit Facility in the initial facility amount

of $50.0 million (the “Encina Facility Amount”).

and Security Agreement (the “Live Oak Credit Agreement”) relating to the Live Oak Credit Facility in the initial facility

amount of $50.0 million (the “Live Oak Facility Amount”).

The Live Oak Credit Facility matures on March 27, 2027.

Availability .

We can draw up to the lesser

of (i) the Encina Facility Amount and (ii) the Borrowing Base.

of (i) the Live Oak Facility Amount and (ii) the borrowing base.

The borrowing base is an amount equal to (i) the difference of (A) the

product of the applicable advance rate which varies from 50.0% to 75.0% depending on the type of loan asset (Defaulted Loans being excluded

in that they carry an advance rate of 0%) and the value, determined in accordance with the Encina Credit Facility (the “Adjusted

in that they carry an advance rate of 0%) and the value, determined in accordance with the Live Oak Credit Facility (the “Adjusted

Borrowing Value”), of certain “eligible” loan assets pledged as security for the loan (the “Borrowing Base Value”)

and (B) the Excess Concentration Amount, as calculated in accordance with the Encina Credit Facility, plus (ii) any amounts held in the

Prefunding Account and, without duplication, Excess Cash held in the Collection Account, less (iii) the product of (a) the amount of any

undrawn funding commitments we have under any loan asset and (b) the Unfunded Exposure Haircut Percentage, and less (iv) $100,000.

loan asset we held as of the date on which the Encina Credit Facility was closed was valued as of that date and each loan asset that we

acquire after such date will be valued at the lowest of its fair value, its face value (excluding accrued interest) and the purchase price

paid for such loan asset.

and (B) the Excess Concentration Amount, as calculated in accordance with the Live Oak Credit Facility, plus (ii) any amounts held in

the Prefunding Account and, without duplication, Excess Cash held in the Collection Account, less (iii) the product of (a) the amount

of any undrawn funding commitments we have under any loan asset and (b) the Unfunded Exposure Haircut Percentage, and less (iv) $100,000.

Each loan asset we held as of the date on which the Live Oak Credit Facility was closed was valued as of that date and each loan asset

that we acquire after such date will be valued at the lowest of its fair value, its face value (excluding accrued interest) and the purchase

price paid for such loan asset.

Adjustments to the value of a loan asset will be made to reflect, among other things and under certain

circumstances, changes in its fair value, a default by the obligor on the loan asset, insolvency of the obligor, acceleration of the

loan asset, and certain modifications to the terms of the loan asset.

The Live Oak Credit Facility contains limitations

on the type of loan assets that are “eligible” to be included in the borrowing base and as to the concentration level of

certain categories of loan assets in the borrowing base such as restrictions on geographic and industry concentrations, asset size and

quality, payment frequency, status and terms, average life, and collateral interests.

In addition, if an asset is to remain an “eligible”

loan asset, we may not make changes to the payment, amortization, collateral and certain other terms of the loan assets without the consent

of the administrative agent that will either result in subordination of the loan asset or be materially averse to the lenders.

The Live Oak Credit Facility requires certain

minimum drawn amounts.

For the period beginning on the closing date of March 27, 2025, and ending March 27, 2027, the minimum funding

amount was $12.5 million.

For the period beginning on March 28, 2025, through maturity, the minimum funding amount is the greater of

$25.0 million and 50% of the Live Oak Facility Amount in effect from time to time.

The Live Oak Credit Facility

is secured by assets of Saratoga Investment Funding III LLC (“SIF III”) and pledged to Live Oak under the Live Oak Credit

SIF III is a wholly owned special purpose entity formed for the purpose of entering into the Live Oak Credit Facility.

Interest Rate and Fees .

Advances under

the Live Oak Credit Facility bear interest at a floating rate per annum equal to the greater of the prevailing Adjusted Term SOFR and

0.75%, plus an applicable margin between 3.50% and 4.25% based on the Live Oak Credit Facility’s utilization.

In addition, we pay

the lenders a commitment fee of 0.50% per year on the unused amount of the Live Oak Credit Facility for the duration of the term of the

Live Oak Credit Facility.

Accrued interest and commitment fees are payable monthly in arrears.

We were also obligated to pay certain

other fees to the lenders in connection with the closing of the Live Oak Credit Facility.

Collateral Tests.

It is a condition precedent

to any borrowing under the Live Oak Credit Facility that the principal amount outstanding under the Live Oak Credit Facility, after giving

effect to the proposed borrowings, not exceed the borrowing base (the “Borrowing Base Test”).

In addition to satisfying the

Borrowing Base Test, the following tests must also be satisfied (together with Borrowing Base Test, the “Collateral Tests”):

Coverage Ratio .

The ratio (expressed as a percentage) of interest collections with respect to pledged loan assets, less certain

fees and expenses relating to the Live Oak Credit Facility, to accrued interest and commitment fees payable to the lenders under

the Live Oak Credit Facility for the last 6 payment periods must equal at least 175.0%.

Overcollateralization Ratio .

The ratio (expressed as a percentage) of the aggregate Adjusted Borrowing Value of “eligible” pledged loan assets plus

the fair value of certain ineligible pledged loan assets (in each case, subject to certain adjustments) to outstanding borrowings

under the Live Oak Credit Facility plus the Unfunded Exposure Amount must equal at least 200.0%.

The Live Oak Credit Facility also may require

payment of outstanding borrowings or replacement of pledged loan assets upon our breach of our representation and warranty that pledged

loan assets included in the borrowing base are “eligible” loan assets.

Such ineligible collateral loans will be excluded

from the calculation of the borrowing base and may lead to a Borrowing Base Deficiency, which may be cured by effecting one or more (or

any combination thereof) of the following actions:

(A) deposit into or credit to the Collection Account cash and Eligible Investments,

(B) repay Advances (together with all accrued and unpaid costs and expenses of the Agents, Custodian, Collateral Administrator, Securities

Intermediary and the Lenders), (C) sell or substitute Collateral Loans in accordance with Article X, or (D) pledge additional Collateral

Loans as Collateral.

Priority of Payments.

The priority of

payments provisions of the Live Oak Credit Facility require, after payment of specified fees and expenses, that collections of interest

from the loan assets and, to the extent that these are insufficient, collections of principal from the loan assets, be applied on each

payment date to payment of outstanding borrowings if the Borrowing Base Test, the Overcollateralization Ratio and the Interest Coverage

Ratio would not otherwise be met.

Operating Expenses .

The priority of payments

provision of the Live Oak Credit Facility provides for the payment of certain of our operating expenses out of collections on interest

and principal in accordance with the priority established in such provision.

The operating expenses payable pursuant to the priority

of payment provisions is limited to $200,000 per annum.

Representations and Warranties;

Events of Default .

The Live Oak Credit Agreement contains customary representations and warranties, affirmative covenants, negative

covenants and events of default.

The Live Oak Credit Agreement does not contain grace periods for breach by us of any negative covenants

or of certain of the affirmative covenants, including, without limitation, those related to preservation of the existence and separateness

of the Company.

Other events of default under the Live Oak Credit Agreement include, among other things, the following:

our failure to maintain an

Interest Coverage Ratio of less than 175%;

our failure to maintain an Overcollateralization Ratio

of less than 200%;

the filing of certain ERISA or tax liens on our assets

or the Equity holder;

failure by Specified Holders to collectively, directly

or indirectly, own and control at least 51% of the outstanding equity interests of Saratoga Investment Advisor, or (y) possess the

right to elect (through contract, ownership of voting securities or otherwise) at all times a majority of the board of directors

(or similar governing body) of Saratoga Investment Advisor and to direct the management policies and decisions of Saratoga Investment

Advisor, or (ii) the dissolution, termination or liquidation in whole or in part, transfer or other disposition, in each case, of

all or substantially all of the assets of, Saratoga Investment Advisor;

indictment or conviction of Saratoga Investment Advisors

or any “key person” for a felony offense, or any fraud, embezzlement or misappropriation of funds by Saratoga Investment

Advisors or any “key person” and, in the case of “key persons,” without a reputable, experienced individual

reasonably satisfactory to Live Oak Lender Finance appointed to replace such key person within 30 days;

resignation, termination, disability or death of a

“key person” or failure of any “key person” to provide active participation in Saratoga Investment Advisors’

daily activities, all without a reputable, experienced individual reasonably satisfactory to Live Oak Lender Finance appointed within

Fees and Expenses .

We paid certain fees

and reimbursed Live Oak Lender Finance, LLC for the aggregate amount of all documented, out-of-pocket costs and expenses, including the

reasonable fees and expenses of lawyers, incurred by Live Oak Banking Company in connection with the Live Oak Credit Facility and the

carrying out of any and all acts contemplated thereunder up to and as of the date of closing.

These amounts totaled $0.8 million.

As of February 28, 2026, we had $37.5 million

outstanding borrowings under the Live Oak Credit Facility.

During the applicable period, we were in compliance with all of the limitations

and requirements under the Live Oak Credit Agreement.

As of February 28, 2025, we had $20.0 million outstanding borrowings under the

Live Oak Credit Facility.

Our borrowing base under the Live Oak Credit Facility at February 28, 2026 and February 28, 2025 was $99.2

million and $86.9 million, respectively.

Valley Credit Facility

Below is a summary of the terms of the senior

secured revolving credit facility we entered into with Valley on November 6, 2025.

We entered into the Credit

and Security Agreement (the “Valley Credit Agreement”) relating to the Valley Credit Facility in the initial facility amount

of $85.0 million (the “Valley Facility Amount”).

The Valley Credit Facility matures on November 6, 2028.

Availability .

SIF II can draw up to the

lesser of (i) the Valley Facility Amount and (ii) the borrowing base.

The borrowing base is an amount equal to (i) the difference of

(x) the Aggregate Borrowing Base Value less (y) the Excess Concentration Amount, plus (ii) the amount on deposit in

the Pre-Funding Account plus , without duplication, the amount of Excess Cash on deposit in the Collection Account, minus (iii)

the product of (A) with respect to each Delayed Drawdown Collateral Loan, the portion of the Unfunded Exposure Amount attributable to

such Delayed Drawdown Collateral Loan multiplied by (B) the Unfunded Exposure Haircut Percentage with respect to such

Delayed Drawdown Collateral Loan, minus (iv) the Availability Block, in each case, as of such date.

Each loan asset

we held as of the date on which the Valley Credit Facility was closed was valued as of that date and each loan asset that we acquire

after such date will be valued at the lowest of its fair value, its face value (excluding accrued interest) and the purchase price paid

for such loan asset.

Adjustments to the value of a loan asset will be made to reflect, among other things and under certain circumstances,

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certain modifications to the terms of the loan asset.

The Encina Credit Facility contains limitations

on the type of loan assets that are “eligible” to be included in the Borrowing Base and as to the concentration level of certain

categories of loan assets in the Borrowing Base such as restrictions on geographic and industry concentrations, asset size and quality,

payment frequency, status and terms, average life, and collateral interests.

The Valley Credit Facility contains limitations

on the type of loan assets that are “eligible” to be included in the borrowing base and as to the concentration level of

certain categories of loan assets in the borrowing base such as restrictions on geographic and industry concentrations, asset size and

quality, payment frequency, status and terms, average life, and collateral interests.

In addition, if an asset is to remain an “eligible”

loan asset, we may not make changes to the payment, amortization, collateral and certain other terms of the loan assets without the consent

of the administrative agent that will either result in subordination of the loan asset or be materially adverse to the lenders.

The Encina Credit Facility requires certain minimum

drawn amounts.

For the period beginning on the closing date and ended April 4, 2022, the minimum funding amount was $12.5 million.

the period beginning on April 5, 2022 through maturity, the minimum funding amount is the greater of $25.0 million and 50% of the Encina

Facility Amount in effect from time to time.

The Encina Credit Facility

is secured by assets of SIF II and pledged to Encina under the Encina Credit Facility.

of the administrative agent that this change will not result in either the subordination of the loan asset or be materially adverse to

The Valley Credit Facility requires a minimum

drawn amount at all times equal to the greater of $25.0 million or 38% of the facility amount in effect at such time.

The Valley Credit Facility

is secured by assets of SIF II and pledged to Valley under the Valley Credit Facility.

SIF II is a wholly owned special purpose entity

formed for the purpose of entering into the Encina Credit Facility.

formed for the purpose of entering into senior secured revolving credit facilities.

Interest Rate and Fees .

Under the Encina

Credit Facility, funds were borrowed from or through certain lenders at the greater of the prevailing LIBOR rate and 0.75%, plus an applicable

margin of 4.00%.

The Encina Credit Agreement includes benchmark replacement provisions which permit the Administrative Agent and the borrower

to select a replacement rate upon the unavailability of LIBOR.

In addition, we pay the lenders a commitment fee of 0.75% per year (or

0.50% if the ratio of advances outstanding to aggregate commitments is greater than or equal to 50%) on the unused amount of the Encina

Credit Facility for the duration of the term of the Encina Credit Facility.

Accrued interest and commitment fees are payable monthly in

We were also obligated to pay certain other fees to the lenders in connection with the closing of the Encina Credit Facility.

Under the Valley

Credit Facility, funds may be borrowed from or through certain lenders at a floating rate per annum equal to Term SOFR plus an applicable

margin of 2.85%, with a SOFR Floor of 1.00%.

In addition, SIF II is required to pay an unused fee on the amount by which the commitment

amount exceeds outstanding principal amounts on each day at a rate per annum equal to 0.75% if the unused amount is greater than 62%

of the commitment amount, or otherwise 0.50%.

We were also obligated to pay certain other fees to the lenders in connection with the

closing of the Valley Credit Facility.

Collateral Tests .

It is a condition precedent

to any borrowing under the Encina Credit Facility that the principal amount outstanding under the Encina Credit Facility, after giving

to any borrowing under the Valley Credit Facility that the principal amount outstanding under the Valley Credit Facility, after giving

effect to the proposed borrowings, not exceed the borrowing base (the “Borrowing Base Test”).

1 unchanged sentence

Borrowing Base Test, the following tests must also be satisfied (together with Borrowing Base Test, the “Collateral Tests”):

Interest Coverage Ratio.

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

Overcollateralization Ratio.

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

The Encina Credit Facility also may require payment

of outstanding borrowings or replacement of pledged loan assets upon our breach of our representation and warranty that pledged loan assets

included in the Borrowing Base are “eligible” loan assets.

Such ineligible collateral loans will be excluded from the calculation

of the Borrowing Base and may lead to a Borrowing Base Deficiency, which may be cured by effecting one or more (or any combination thereof)

of the following actions:

(A) deposit into or credit to the collection account cash and eligible investments, (B) repay outstanding borrowings

(together with certain costs and expenses), (C) sell or substitute loan assets in accordance with the Encina Credit Facility, or (D) pledge

additional loan assets as collateral.

Compliance with the Collateral Tests is also a condition to the discretionary sale of pledged loan

assets by us.

Coverage Ratio.

The ratio (expressed as a percentage) of interest collections with respect to pledged loan assets, less certain

fees and expenses relating to the Valley Credit Facility, to accrued interest and commitment fees payable to the lenders under the

Valley Credit Facility for the last six payment periods must equal at least 175.0%.

Overcollateralization

The ratio (expressed as a percentage) of the aggregate Adjusted Borrowing Value of “eligible” pledged loan

assets plus the fair value of certain ineligible pledged loan assets (in each case, subject to certain adjustments) to outstanding

borrowings under the Valley Credit Facility plus the Unfunded Exposure Amount must equal at least 200.0%.

The Valley Credit Facility also may require payment

of outstanding borrowings or replacement of pledged loan assets upon our breach of our representation and warranty that pledged loan

assets included in the borrowing base are “eligible” loan assets.

Such ineligible collateral loans will be excluded from

the calculation of the borrowing base and may lead to a Borrowing Base Deficiency, which may be cured by effecting one or more (or any

combination thereof) of the following actions:

(A) deposit into or credit to the collection account cash and eligible investments, (B)

repay outstanding borrowings (together with certain costs and expenses), (C) sell or substitute loan assets in accordance with the Valley

Credit Facility, or (D) pledge additional loan assets as collateral.

Compliance with the Collateral Tests is also a condition to the

discretionary sale of pledged loan assets by us.

Priority of Payments .

The priority of payments

provisions of the Encina Credit Facility require, after payment of specified fees and expenses, that collections of interest from the

loan assets and, to the extent that these are insufficient, collections of principal from the loan assets, be applied on each payment

date to payment of outstanding borrowings if the Borrowing Base Test, the Overcollateralization Ratio and the Interest Coverage Ratio

would not otherwise be met.

The priority of

payments provisions of the Valley Credit Facility require, after payment of specified fees and expenses, that collections of interest

from the loan assets and, to the extent that these are insufficient, collections of principal from the loan assets, be applied on each

payment date to payment of outstanding borrowings if the Borrowing Base Test, the Overcollateralization Ratio and the Interest Coverage

Ratio would not otherwise be met.

Operating Expenses .

The priority of payments

provision of the Encina Credit Facility provides for the payment of certain of our operating expenses out of collections on interest and

principal in accordance with the priority established in such provision.

The operating expenses payable pursuant to the priority of payment

provisions is limited to $200,000 per annum.

provision of the Valley Credit Facility provides for the payment of certain of our operating expenses out of collections on interest

and principal in accordance with the priority established in such provision.

The operating expenses payable pursuant to the priority

of payment provisions is limited to $200,000 per annum.

Representations and Warranties;

Events of Default .

The Encina Credit Agreement contains customary representations and warranties, affirmative covenants, negative

The Valley Credit Agreement contains customary representations and warranties, affirmative covenants, negative

covenants and events of default.

The Encina Credit Agreement does not contain grace periods for breach by us of any negative covenants

The Valley Credit Agreement does not contain grace periods for breach by us of any negative covenants

or of certain of the affirmative covenants, including, without limitation, those related to preservation of the existence and separateness

of the Company.

Other events of default under the Encina Credit Agreement include, among other things, the following:

o our failure to maintain an

Other events of default under the Valley Credit Agreement include, among other things, the following:

our failure to maintain an

Interest Coverage Ratio of less than 175%;

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

o the filing of certain ERISA

our failure to maintain an

Overcollateralization Ratio of less than 200%;

the filing of certain ERISA

or tax liens on our assets or the equity holder;

o failure by Specified Holders

to collectively, directly or indirectly, own and control at least 51% of the outstanding equity interests of Saratoga Investment Advisor,

or (y) possess the right to elect (through contract, ownership of voting securities or otherwise) at all times a majority of the board

of directors (or similar governing body) of Saratoga Investment Advisor and to direct the management policies and decisions of Saratoga

Investment Advisor, or (ii) the dissolution, termination or liquidation in whole or in part, transfer or other disposition, in each case,

of all or substantially all of the assets of, Saratoga Investment Advisor;

o indictment or conviction of

Saratoga Investment Advisors or any “key person” for a felony offense, or any fraud, embezzlement or misappropriation of

funds by Saratoga Investment Advisors or any “key person” and, in the case of “key persons,” without a reputable,

experienced individual reasonably satisfactory to Encina Lender Finance appointed to replace such key person within 30 days;

o resignation, termination, disability

or death of a “key person” or failure of any “key person” to provide active participation in Saratoga Investment

Advisors’ daily activities, all without a reputable, experienced individual reasonably satisfactory to Encina Lender Finance appointed

within 30 days.

failure by Specified Holders

to collectively, directly or indirectly, own and control at least 51% of the outstanding equity interests of Saratoga Investment

Advisor, or (y) possess the right to elect (through contract, ownership of voting securities or otherwise) at all times a majority

of the board of directors (or similar governing body) of Saratoga Investment Advisor and to direct the management policies and decisions

of Saratoga Investment Advisor, or (ii) the dissolution, termination or liquidation in whole or in part, transfer or other disposition,

in each case, of all or substantially all of the assets of, Saratoga Investment Advisor;

indictment or conviction of Saratoga Investment Advisors

or any “key person” for a felony offense, or any fraud, embezzlement or misappropriation of funds by Saratoga Investment

Advisors or any “key person” and, in the case of “key persons,” without a reputable, experienced individual

reasonably satisfactory to Valley appointed to replace such key person within 30 days;

resignation, termination, disability or death of two

or more “key persons” or failure of any two or more “key persons” to provide active participation in Saratoga

Investment Advisors’ daily activities, all without a reputable, experienced individual reasonably satisfactory to the Required

Lenders (as defined in the Valley Credit Agreement) appointed within 30 days.

Fees and Expenses .

We paid certain fees

and reimbursed Encina Lender Finance, LLC for the aggregate amount of all documented, out-of-pocket costs and expenses, including the

reasonable fees and expenses of lawyers, incurred by Encina Lender Finance, LLC in connection with the Encina Credit Facility and the

carrying out of any and all acts contemplated thereunder up to and as of the date of closing.

and reimbursed Valley for the aggregate amount of all documented, out-of-pocket costs and expenses, including the reasonable fees and

expenses of lawyers, incurred by Valley in connection with the Valley Credit Facility and the carrying out of any and all acts contemplated

thereunder up to and as of the date of closing.

These amounts totaled $1.4 million.

On January 27, 2023, we entered into the first

amendment to the Encina Credit Agreement to, among other things:

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

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

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

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

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

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

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

As of February 28, 2026, we had $32.5 million

outstanding borrowings under the Encina Credit Facility.

As of February 29, 2024, we had $35.0 million outstanding borrowings under the

Encina Credit Facility.

Our borrowing base under the Encina Credit Facility at February 28, 2025 and February 29, 2024 was $78.6 million

and $65.0 million, respectively.

Live Oak Facility

On March 27, 2024, the Company and its wholly

owned special purpose subsidiary, SIF III, entered into a credit and security agreement (the “Live Oak Credit Agreement”),

by and among SIF III, as borrower, the Company, as collateral manager and equityholder, the lenders from time to time parties thereto,

Live Oak, as administrative agent and collateral agent, U.S.

Bank National Association, as custodian, and U.S.

Bank Trust Company, National

Association, as collateral administrator, relating to Live Oak Credit Facility.

The Live Oak Credit Facility originally provided

for borrowings in U.S.

dollars in an aggregate amount of up to $50.0 million.

During the first two years following the closing date,

SIF III may request one or more increases in the commitment amount from $50.0 million to an amount not to exceed $150.0 million,

subject to certain terms and conditions and a customary fee.

The terms of the Live Oak Credit Agreement require a minimum drawn amount

of $12.5 million at all times during the period ending March 27, 2025 and, thereafter, the greater of:

(i) $25.0 million and

(ii) 50% of the facility amount in effect at such time.

The Live Oak Credit Facility matures on March 27, 2027.

Advances are available

during the term of the Live Oak Credit Facility and must be repaid in full at maturity.

SIF III may request an extension of the maturity

date by an additional one year, subject to the agreement of the lenders and an extension fee.

On June 14, 2024, the Company entered into the

first amendment to the Live Oak Credit Agreement (the “Amendment”).

The Amendment, among other things:

increased the borrowings available under the Live Oak Credit Facility from up to $50.0 million to up to $75.0 million, subject to a borrowing base requirement;

added new lenders (as identified in the Amendment) to the Live Oak Credit Agreement;

replaced administrative agent approval with “Required Lender” (as defined in the Live Oak Credit Agreement) approval with respect to certain matters;

replaced Required Lender approval with 100% lender approval with respect to certain matters;

changed the definition of Required Lender to require the approval of at least two unaffiliated lenders.

Advances under the Live Oak Credit Facility are

subject to a borrowing base calculation, and the Live Oak Credit Facility has various eligibility criteria for loans to be included in

the borrowing base.

Advances under the Live Oak Credit Facility bear interest at a floating rate per annum equal to Adjusted Term SOFR

plus an applicable margin between 3.50% and 4.25% based on the Live Oak Credit Facility’s utilization.

The Live Oak Credit

Agreement also provides for an unused fee of 0.50% on the unused commitments.

SIF III’s obligations to the lenders under the

Live Oak Credit Facility are secured by a first priority security interest in substantially all of SIF III’s assets.

SIF III’s obligations to the lenders under the Live Oak Credit Facility are secured by a pledge by the Company of its equity interests

in SIF III, which is evidenced by the equity pledge agreement, dated as of March 27, 2024, by and between the Company, as pledgor, and

Live Oak, as collateral agent for the benefit of the secured parties.

In connection with the Live Oak Credit Agreement,

the Company entered into a loan sale and contribution agreement with SIF III, dated as of March 27, 2024, by and between the Company,

as seller, and SIF III, as purchaser, pursuant to which the Company will sell or contribute certain loans held by the Company to SIF III

to be used to support the borrowing base under the Live Oak Credit Facility.

The Live Oak Credit Facility permits loan proceeds and excess

cash in SIF III’s collection accounts to be distributed to us at any time based on three business days advance notice, subject to

compliance with various conditions, including the absence of a default or event of default, the absence of an over-advance against the

borrowing base and the absence of a violation of the financial covenants.

As of February 28, 2025, we had $20.0 million

outstanding borrowings under the Live Oak Credit Facility.

As of February 29, 2024, we had zero outstanding borrowings under the Live

Oak Credit Facility.

Our borrowing base under the Live Oak Credit Facility at February 28, 2025 and February 29, 2024 was $86.9 million

and $0.0 million, respectively.

Our asset coverage ratio, as defined in

the 1940 Act, was 162.9% as of February 28, 2025 and 161.1% as of February 29, 2024.

SBA-guaranteed debentures

In addition, we, through two current wholly owned

subsidiaries, sought and obtained licenses from the SBA to operate an SBIC.

In this regard, our wholly owned subsidiaries, SBIC II LP

and SBIC III LP, received an SBIC license from the SBA on August 14, 2019 and September 29, 2022, respectively.

SBICs are designated to

stimulate the flow of private equity capital to eligible small businesses.

Under SBA regulations, SBICs may make loans to eligible small

businesses and invest in the equity securities of small businesses.

Our wholly owned subsidiary SBIC LP fully repaid its outstanding debentures

and subsequently surrendered its license to the SBA on January 3, 2023, and SBIC LP subsequently merged with and into the Company.

The SBIC license allows our SBIC Subsidiaries

to obtain leverage by issuing SBA-guaranteed debentures.

SBA-guaranteed debentures are non-recourse, interest only debentures with interest

payable semi-annually and have a ten-year maturity.

The principal amount of SBA-guaranteed debentures is not required to be paid prior

to maturity but may be prepaid at any time without penalty.

The interest rate of SBA-guaranteed debentures is fixed on a semi-annual basis

at a market-driven spread over U.S.

Treasury Notes with 10-year maturities.

The SBIC Subsidiaries are regulated by the SBA.

SBA regulations currently limit the amount that our SBIC Subsidiaries may individually borrow up to a maximum of $175.0 million of SBA

debentures if the SBIC Subsidiary has at least $87.5 million in regulatory capital, subject to the SBA’s approval.

Under current

SBIC regulations, for two or more SBICs under common control, the maximum amount of outstanding SBA debentures cannot exceed $350.0 million.

The SBIC Subsidiaries are able to borrow funds from the SBA against regulatory capital (which generally approximates equity capital in

the respective SBIC) and are subject to customary regulatory requirements, including, but not limited to, periodic examination by the

We received exemptive relief from the SEC to permit

us to exclude the debt of our SBIC Subsidiaries guaranteed by the SBA from the definition of senior securities in the asset coverage test

under the 1940 Act.

This allows us increased flexibility under the asset coverage test by permitting us to borrow up to $350.0 million

more than we would otherwise be able to absent the receipt of this exemptive relief.

On April 16, 2018, as permitted by the Small Business

Credit Availability Act, which was signed into law on March 23, 2018, our board of directors, including a majority of our independent

directors, approved of our becoming subject to a minimum asset coverage ratio of 150% from 200% under Sections 18(a)(1) and 18(a)(2) of

the Investment Company Act, as amended.

The 150% asset coverage ratio became effective on April 16, 2019.

As of February 28, 2025, SBIC LP had $0.0 million

outstanding borrowings under the Valley Credit Facility.

Our borrowing base under the Valley Credit Facility at February 28, 2026 was

$77.1 million.

SBA Debentures

The Company’s wholly owned subsidiaries,

SBIC II LP and SBIC III LP, received SBIC licenses from the SBA on August 14, 2019 and September 29, 2022, respectively.

SBIC Subsidiaries provide up to $175.0 million in long-term capital in the form of debentures guaranteed by the SBA.

The Company’s

wholly owned subsidiary, 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.

Under current SBIC regulations, for two or more SBICs under common control, the maximum amount of outstanding SBA debentures cannot exceed

$350.0 million.

SBICs are designed to stimulate the flow of private

equity capital to eligible small businesses.

Under SBA regulations, SBICs may make loans to eligible small businesses and invest in the

equity securities of small businesses.

Under present SBA regulations, eligible small businesses include businesses that have a tangible

net worth not exceeding $24.0 million and have average annual fully taxed net income not exceeding $8.0 million for the two most recent

fiscal years.

In addition, an SBIC must devote 25.0% of its investment activity to “smaller enterprises” as defined by the

A smaller enterprise is one that has a net worth not exceeding $6.0 million and has an average annual fully taxed net income not

exceeding $2.0 million for the two most recent fiscal years.

SBA regulations also provide alternative size standard criteria to determine

eligibility, which depend on the industry in which the business is engaged and are based on such factors as the number of employees and

According to SBA regulations, SBICs may make long-term loans to small businesses, invest in the equity securities of such

businesses and provide them with consulting and advisory services.

The SBIC Subsidiaries are able to borrow funds

from the SBA against each SBIC’s regulatory capital (which generally approximates equity capital in the respective SBIC).

Subsidiaries are subject to customary regulatory requirements including but not limited to, a periodic examination by the SBA and requirements

to maintain certain minimum financial ratios and other covenants.

Receipt of an SBIC license does not assure that the SBIC Subsidiaries

will receive SBA-guaranteed debenture funding, which is dependent upon the SBIC Subsidiaries complying with SBA regulations and policies.

The SBA, as a creditor, will have a superior claim to each SBIC Subsidiary’s assets over the Company’s stockholders and debtholders

in the event that the Company liquidates such SBIC Subsidiary or the SBA exercises its remedies under the SBA-guaranteed debentures issued

by the SBIC Subsidiary upon an event of default.

The Company received exemptive relief from the

SEC to permit it to exclude the debentures guaranteed by the SBA of the SBIC Subsidiaries from the definition of senior securities in

the asset coverage test under the 1940 Act.

This allows the Company increased flexibility under the asset coverage requirement by permitting

it to borrow up to $350.0 million more than it would otherwise be able to absent the receipt of this exemptive relief.

As of February 28, 2026, SBIC II LP had $87.5 million

in regulatory capital and $84.0 million SBA-guaranteed debentures outstanding.

SBIC II LP had $87.5 million in regulatory capital

and $131.0 million SBA-guaranteed debentures outstanding.

SBIC III LP had $87.5 million in regulatory capital and $39.0 million

SBA-guaranteed debentures outstanding.

SBIC III LP had $87.5 million in regulatory

capital and $76.0 million SBA-guaranteed debentures outstanding.

Unsecured notes

7.75% 2025 Notes

On June 24, 2020, we issued $37.5 million aggregate

principal amount of our 7.25% 2025 Notes for net proceeds of $36.3 million after deducting underwriting commissions of approximately $1.2

Offering costs incurred were approximately $0.3 million.

On July 6, 2020, the underwriters exercised their option in full to

purchase an additional $5.625 million in aggregate principal amount of its 7.25% 2025 Notes.

Net proceeds to the Company were $5.4 million

after deducting underwriting commissions of approximately $0.2 million.

The net proceeds from the offering were used for general corporate

purposes in accordance with our investment objective and strategies.

Financing costs of $1.6 million related to the 7.25% 2025 Notes have

been capitalized and were amortized over the term of the 7.25% 2025 Notes.

On July 14, 2022, we redeemed $43.1 million in

aggregate principal amount of the issued and outstanding 7.25% 2025 Notes.

The 7.25% 2025 Notes were listed on the NYSE under the trading

symbol of “SAK” and have been delisted following the full redemption on July 14, 2022.

At February 28, 2025, the total amount of 7.25%

2025 Notes outstanding was $0.0 million.

7.75% 2025 Notes

On July 9, 2020, we issued $5.0 million aggregate

principal amount of our 7.75% fixed-rate notes due in 2025 (the “7.75% 2025 Notes”) for net proceeds of $4.8 million after

deducting underwriting commissions of approximately $0.2 million.

Offering costs incurred were approximately $0.1 million.

the 7.75% 2025 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 7.75% per year.

7.75% 2025 Notes mature on July 9, 2025 and may be redeemed in whole or in part at any time or from time to time at our option, subject

to a fee depending on the date of repayment.

The net proceeds from the offering were used for general corporate purposes in accordance

with our investment objective and strategies.

Financing costs of $0.3 million related to the 7.75% 2025 Notes have been capitalized and

are being amortized over the term of the Notes.

The 7.75% 2025 Notes are not listed and have a par value of $25.00 per note.

On July 9, 2020, we issued $5.0 million in

aggregate principal amount of our 7.75% fixed-rate notes due in 2025 (the “7.75% 2025 Notes”) for net proceeds of $4.8

million after deducting underwriting commissions of approximately $0.2 million.

Offering costs incurred were approximately $0.1

Interest on the 7.75% 2025 Notes was paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate

of 7.75% per year.

The 7.75% 2025 Notes matured and were paid off on July 9, 2025.

At February 28, 2026, the total amount of 7.75%

1 unchanged sentence

6.25% 2027 Notes

On December 29, 2020, we issued $5.0 million in

aggregate principal amount of our 6.25% fixed-rate notes due in 2027 (the “6.25% 2027 Notes”).

Offering costs incurred

were approximately $0.1 million.

Interest on the 6.25% 2027 Notes is paid quarterly in arrears on February 28, May 31,

August 31 and November 30, at a rate of 6.25% per year.

The 6.25% 2027 Notes mature on December 29, 2027 and may be redeemed

in whole or in part at any time or from time to time at our option, on or after December 29, 2024.

The net proceeds from the offering

were used for general corporate purposes in accordance with our investment objective and strategies.

Financing costs of $0.1 million

related to the 6.25% 2027 Notes have been capitalized and are being amortized over the term of the Notes.

On January 28, 2021, we issued an additional $10.0

million in aggregate principal amount of the 6.25% 2027 Notes for net proceeds of $9.7 million after deducting underwriting commissions

of approximately $0.3 million (the “Additional 6.25% 2027 Notes”).

The Additional 6.25% 2027 Notes are treated as a single

series with the existing 6.25% 2027 Notes under the indenture and have the same terms as the existing 6.25% 2027 Notes.

Offering costs

incurred were approximately $0.1 million.

Interest on the 6.25% 2027 Notes is paid quarterly in arrears on February 28, May 31, August

31 and November 30, at a rate of 6.25% per year.

The 6.25% 2027 Notes mature on January 28, 2027 and commencing January 28, 2023, may

be redeemed in whole or in part at any time or from time to time at our option on or after December 29, 2024.

The net proceeds from the

offering were used for general corporate purposes in accordance with our investment objective and strategies.

Financing costs of $0.4

million related to the 6.25% 2027 Notes have been capitalized and are being amortized over the term of the 6.25% 2027 Notes.

2027 Notes are not listed and have a par value of $25.00 per note.

On December 29, 2020, the Company issued $5.0

million in aggregate principal amount of 6.25% fixed-rate notes due in 2027 (the “Existing 6.25% 2027 Notes”).

costs incurred were approximately $0.1 million.

On January 28, 2021, the Company issued an additional $10.0 million in aggregate

principal amount of the 6.25% 2027 Notes for net proceeds of $9.7 million after deducting underwriting commissions of approximately $0.3

million (the “Additional 6.25% 2027 Notes” and together with the Existing 6.25% 2027 Notes, the 6.25% 2027 Notes).

costs incurred were approximately $0.1 million.

The Additional 6.25% 2027 Notes are treated as a single series with the existing 6.25%

2027 Notes under the indenture and have the same terms as the existing 6.25% 2027 Notes.

Interest on the 6.25% 2027 Notes is paid quarterly

in arrears on February 28, May 31, August 31 and November 30, at a rate of 6.25% per year.

The 6.25% 2027 Notes mature

on December 29, 2027 and may be redeemed in whole or in part at any time or from time to time at the Company’s option, on or after

December 29, 2024.

The net proceeds from the offering were used for general corporate purposes in accordance with the Company’s

investment objective and strategies.

Financing costs of $0.5 million related to the 6.25% 2027 Notes have been capitalized and are

being amortized over the term of the Notes.

At February 28, 2026, the total amount of 6.25%

2 unchanged sentences

On March 10, 2021, we issued $50.0 million in

aggregate principal amount of the 4.375% fixed rate notes due 2026 (the “4.375% 2026 Notes”) for net proceeds of $49.0 million

after deducting underwriting commissions of approximately $1.0 million.

aggregate principal amount of the 4.375% fixed rate notes due 2026 (the “Existing 4.375% 2026 Notes”) for net proceeds of

$49.0 million after deducting underwriting commissions of approximately $1.0 million.

Offering costs incurred were approximately $0.3 million.

Interest on the 4.375% 2026 Notes is paid semi-annually in arrears on February 28 and August 28, at a rate of 4.375% per year.

4.375% 2026 Notes mature on February 28, 2026 and may be redeemed in whole or in part at any time on or after November 28, 2025 at par

plus a “make-whole” premium, and thereafter at par.

The net proceeds from the offering were used for general corporate purposes

in accordance with our investment objective and strategies.

Financing costs of $1.2 million related to the 4.375% 2026 Notes have

been capitalized and are being amortized over the term of the 4.375% 2026 Notes.

On July 15, 2021, we issued an additional $125.0

million in aggregate principal amount of the 4.375% 2026 Notes (the “Additional 4.375% 2026 Notes”) for net proceeds for approximately

$123.5 million, based on the public offering price of 101.00% of the aggregate principal amount of the Additional 4.375% 2026 Notes, after

deducting the underwriting discount of $2.5 million and the offering expenses of approximately $0.2 million payable by the Company.

net proceeds from the offering were used to redeem all of the outstanding 6.25% 2025 Notes (as described above), and for general corporate

purposes in accordance with our investment objective and strategies.

The Additional 4.375% 2026 Notes are treated as a single series with

the existing 4.375% 2026 Notes under the indenture and have the same terms as the existing 4.375% 2026 Notes.

July 15, 2021, the Company issued an additional $125.0 million in aggregate principal amount of the 4.375% 2026 Notes (the “Additional

4.375% 2026 Notes” and together with the Existing 4.375% 2026 Notes, the “4.375% 2026 Notes”) for net proceeds for

approximately $123.8 million, based on the public offering price of 101.00% of the aggregate principal amount of the Additional 4.375%

2026 Notes, after deducting the underwriting commissions of $2.5 million.

Offering costs incurred were approximately $0.2 million.

Additional 4.375% 2026 Notes were treated as a single series with the existing 4.375% 2026 Notes under the indenture and had the same

terms as the existing 4.375% 2026 Notes.

Interest on the 4.375% 2026 Notes was paid semi-annually in arrears on February 28 and

August 28, at a rate of 4.375% per year.

The 4.375% 2026 Notes matured and were paid off on February 28, 2026.

At February 28, 2026 the total amount of 4.375%

1 unchanged sentence

4.35% 2027 Notes

On January 19, 2022, we

issued $75.0 million in aggregate principal amount of our 4.35% fixed-rate Notes due in 2027 (the “4.35% 2027 Notes”)

for net proceeds of $73.0 million, based on the public offering price of 99.317% of the aggregate principal amount of the 4.35% 2027 Notes,

after deducting the underwriting commissions of approximately $1.5 million .

Offering costs incurred

were approximately $0.3 million.

Interest on the 4.35% 2027 Notes is paid semi-annually in arrears on February 28 and

August 28, at a rate of 4.35% per year.

The 4.35% 2027 Notes mature on February 28, 2027 and may be redeemed in whole or

in part at our option at any time prior to November 28, 2026, at par plus a “make-whole” premium, and thereafter at par .

The net proceeds from the offering were used for general corporate purposes in accordance with

our investment objective and strategies.

Financing costs of $1.8 million related to the 4.35% 2027 Notes have been capitalized and

are being amortized over the term of the 4.35% 2027 Notes.

On January 19, 2022, we issued $75.0 million

in aggregate principal amount of our 4.35% fixed-rate Notes due in 2027 (the “4.35% 2027 Notes”) for net proceeds of $73.0

million, based on the public offering price of 99.317% of the aggregate principal amount of the 4.35% 2027 Notes, after deducting the

underwriting commissions of approximately $1.5 million.

Offering costs incurred were approximately $0.3 million.

on the 4.35% 2027 Notes is paid semi-annually in arrears on February 28 and August 28, at a rate of 4.35% per year.

The 4.35% 2027

Notes mature on February 28, 2027 and may be redeemed in whole or in part at our option at any time prior to November 28, 2026,

at par plus a “make-whole” premium, and thereafter at par .

The net proceeds from the offering were used for general

corporate purposes in accordance with our investment objective and strategies.

Financing costs of $1.8 million related to the 4.35%

2027 Notes have been capitalized and are being amortized over the term of the 4.35% 2027 Notes.

At February 28, 2026 the total amount of 4.35%

1 unchanged sentence

6.00% 2027 Notes

On April 27, 2022, we issued $87.5 million in

aggregate principal amount of 6.00% fixed-rate notes due 2027 (the “6.00% 2027 Notes”) for net proceeds of $84.8 million after

deducting underwriting commissions of approximately $2.7 million.

On April 27, 2022, the Company issued $87.5 million

in aggregate principal amount of 6.00% fixed-rate notes due 2027 (the “Existing 6.00% 2027 Notes”) for net proceeds of $84.8

million after deducting underwriting commissions of approximately $2.7 million.

Offering costs incurred were approximately $0.1 million.

2022, the underwriters partially exercised their option to purchase an additional $10.0 million in aggregate principal amount of the 6.00%

Net proceeds were $9.7 million after deducting underwriting commissions of approximately $0.3 million.

Interest on the 6.00%

2027 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 6.00% per year.

The 6.00% 2027

Notes mature on April 30, 2027 and commencing April 27, 2024, may be redeemed in whole or in part at any time or from time to time at

The net proceeds from the offering were used for general corporate purposes in accordance with our investment objective and

On May 10, 2022, the underwriters partially exercised their option to purchase an additional $10.0 million in aggregate principal amount

of the Existing 6.00% 2027 Notes for net proceeds of $9.7 million after deducting underwriting commissions of approximately $0.3 million.

On August 15, 2022, the Company issued an additional $8.0 million in aggregate principal amount of the 6.00% 2027 Notes (the “Additional

6.00% 2027 Notes” and together with the Existing 6.00% 2027 Notes, the “6.00% 2027 Notes”) for net proceeds of $7.8

million, based on the public offering price of 97.80% of the aggregate principal amount of the 6.00% 2027 Notes.

Additional offering

costs incurred were approximately $0.2 million.

The Additional 6.00% 2027 Notes are treated as a single series with the existing 6.00%

2027 Notes under the indenture and have the same terms as the Existing 6.00% 2027 Notes.

Interest on the 6.00% 2027 Notes is paid quarterly

in arrears on February 28, May 31, August 31 and November 30, at a rate of 6.00% per year.

The 6.00% 2027 Notes mature on April 30, 2027

and commencing April 27, 2024, may be redeemed in whole or in part at any time or from time to time at the Company’s option.

net proceeds from the offering were used for general corporate purposes in accordance with the Company’s investment objective and

Financing costs of $3.3 million related to the 6.00% 2027 Notes have been capitalized and are being amortized over the term

1 unchanged sentence

The 6.00% 2027 Notes are listed on the NYSE under the trading symbol “SAT” with a par value of $25.00

On August 15, 2022, we issued an additional $8.0

million in aggregate principal amount of the 6.00% 2027 Notes (the “Additional 6.00% 2027 Notes”) for net proceeds of $7.8

million, based on the public offering price of 97.80% of the aggregate principal amount of the 6.00% 2027 Notes.

The Additional 6.00%

2027 Notes are treated as a single series with the existing 6.00% 2027 Notes under the indenture and have the same terms as the existing

6.00% 2027 Notes.

The net proceeds from the offering were used for general corporate purposes in accordance with our investment objective

and strategies.

Additional offering costs incurred were approximately $0.03 million.

Additional financing costs of $0.03 million related

to the 6.00% 2027 Notes have been capitalized and are being amortized over the term of the 6.00% 2027 Notes.

At February 28, 2026 the total amount of 6.00%

1 unchanged sentence

7.00% 2025 Notes

On September 8, 2022, we issued $12.0 million

in aggregate principal amount of 7.00% fixed-rate notes due 2025 (the “7.00% 2025 Notes”) for net proceeds of $11.6 million

after deducting customary fees and offering expenses of approximately $0.4 million.

Interest on the 7.00% 2025 Notes is paid quarterly

in arrears on February 28, May 31, August 31 and November 30, at a rate of 7.00% per year.

The 7.00% 2025 Notes mature on September 8,

2025 and commencing September 8, 2024, may be redeemed in whole or in part at any time or from time to time at our option.

The net proceeds

from the offering were used for general corporate purposes in accordance with our investment objective and strategies.

Financing costs

of $0.05 million related to the 7.00% 2025 Notes have been capitalized and are being amortized over the term of the 7.00% 2025 Notes.

On September 8, 2022, the Company issued $12.0

million in aggregate principal amount of 7.00% fixed-rate notes due 2025 (the “7.00% 2025 Notes”) for net proceeds of $11.6

million after deducting underwriting discounts of approximately $0.4 million.

Additional offering costs incurred were approximately $0.05

Interest on the 7.00% 2025 Notes was paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate

of 7.00% per year.

The 7.00% 2025 Notes matured and were paid off on September 8, 2025.

Financing costs of $0.04 million related to the

7.00% 2025 Notes have been capitalized and are being amortized over the term of the 7.00% 2025 Notes.

At February 28, 2026 the total amount of 7.00%

1 unchanged sentence

8.00% 2027 Notes

On October 27, 2022, we issued $40.0 million in

aggregate principal amount of our 8.00% fixed-rate notes due 2027 (the “8.00% 2027 Notes”) for net proceeds of $38.7 million

after deducting underwriting commissions of approximately $1.3 million.

Offering costs incurred were approximately $0.1 million.

10, 2022, the underwriters partially exercised their option to purchase an additional $6.0 million in aggregate principal amount of the

8.00% 2027 Notes.

Net proceeds were $5.8 million after deducting underwriting commissions of approximately $0.2 million.

Interest on the

8.00% 2027 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 8.00% per year.

2027 Notes mature on October 31, 2027 and commencing October 27, 2024, may be redeemed in whole or in part at any time or from time to

time at our option.

The net proceeds from the offering were used for general corporate purposes in accordance with our investment objective

and strategies.

Financing costs of $1.73 million related to the 8.00% 2027 Notes have been capitalized and are being amortized over the

term of the 8.00% 2027 Notes.

The 8.00% 2027 Notes are listed on the NYSE under the trading symbol “SAJ” with a par value

of $25.00 per note.

On October 27, 2022, the Company issued $40.0

million in aggregate principal amount of our 8.00% fixed-rate notes due 2027 (the “8.00% 2027 Notes”) for net proceeds of

$38.7 million after deducting underwriting commissions of approximately $1.3 million.

Offering costs incurred were approximately $0.2

On November 10, 2022, the underwriters partially exercised their option to purchase an additional $6.0 million in aggregate

principal amount of the 8.00% 2027 Notes for net proceeds to the Company of $5.8 million after deducting underwriting commissions of

approximately $0.2 million.

Interest on the 8.00% 2027 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November

30, at a rate of 8.00% per year.

The 8.00% 2027 Notes mature on October 31, 2027 and commencing October 27, 2024, may be redeemed in

whole or in part at any time or from time to time at the Company’s option.

The net proceeds from the offering were used for general

corporate purposes in accordance with the Company’s investment objective and strategies.

Financing costs of $1.7 million related

to the 8.00% 2027 Notes have been capitalized and are being amortized over the term of the 8.00% 2027 Notes.

The 8.00% 2027 Notes are

listed on the NYSE under the trading symbol “SAJ” with a par value of $25.00 per note.

At February 28, 2026 the total amount of 8.00%

6 unchanged sentences

21, 2022, the underwriters fully exercised their option to purchase an additional $7.875 million in aggregate principal amount of the

8.125% 2027 Notes.

Net proceeds were $7.6 million after deducting underwriting commissions of approximately $0.2 million.

8.125% 2027 Notes for net proceeds of $7.6 million after deducting underwriting commissions of approximately $0.2 million.

the 8.125% 2027 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 8.125% per year.

14 unchanged sentences

Offering costs incurred were approximately $0.03 million.

Interest on the 8.75% 2025 Notes is paid quarterly in arrears on February 28,

Interest on the 8.75% 2025 Notes was paid quarterly in arrears on February

28, May 31, August 31 and November 30, at a rate of 8.75% per year.

On February 2, 2024, pursuant to the terms of the indenture governing

the 8.75% 2025 Notes, we elected to exercise our option to extend the maturity date of the 8.75% 2025 Notes from March 31, 2024 to March

Net proceeds from this offering were used to make investments in middle-market companies (including investments made through

our SBIC Subsidiaries) in accordance with our investment objective and strategies and general corporate purposes.

Financing costs and

discounts of $0.7 million related to the 8.75% 2025 Notes have been capitalized and are being amortized over the term of the 8.75% 2025

On February 2, 2024, pursuant to the terms of the indenture

governing the 8.75% 2025 Notes, we elected to exercise our option to extend the maturity date of the 8.75% 2025 Notes from March 31,

2024 to March 31, 2025.

The 8.75% 2025 Notes were paid off in full at maturity on March 31, 2025.

At February 28, 2026, the total amount of 8.75%

2 unchanged sentences

On April 14, 2023, we issued $50.0 million in

aggregate principal amount of 8.50% fixed-rate notes due 2028 (the “8.50% 2028 Notes”) for net proceeds of $48.4 million after

deducting underwriting commissions of approximately $1.6 million.

aggregate principal amount of 8.50% fixed-rate notes due 2028 (the “8.50% 2028 Notes”) for net proceeds of $48.4 million

after deducting underwriting commissions of approximately $1.6 million.

Offering costs incurred were approximately $0.03 million.

2023, the underwriters fully exercised their option to purchase an additional $7.5 million in aggregate principal amount of the 8.50%

Net proceeds were $7.3 million after deducting underwriting commissions of approximately $0.2 million.

Interest on the 8.50%

2028 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 8.50% per year.

2028 Notes mature on April 15, 2028, and commencing April 14, 2025, may be redeemed in whole or in part at any time or from time to time

at our option.

Net proceeds from this offering were used to repay a portion of the outstanding indebtedness under the Encina Credit Facility,

make investments in middle-market companies (including investments made through our SBIC Subsidiaries) in accordance with our investment

objective and strategies and for general corporate purposes.

Financing costs of $2.0 million related to the 8.50% 2028 Notes have been

capitalized and are being amortized over the term of the 8.50% 2028 Notes.

The 8.50% 2028 Notes are listed on the NYSE under the trading

symbol “SAZ” with a par value of $25.00 per note.

April 26, 2023, the underwriters fully exercised their option to purchase an additional $7.5 million in aggregate principal amount of

the 8.50% 2028 Notes for net proceeds of $7.3 million after deducting underwriting commissions of approximately $0.2 million.

on the 8.50% 2028 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate of 8.50% per year.

The 8.50% 2028 Notes mature on April 15, 2028, and commencing April 14, 2025, may be redeemed in whole or in part at any time or from

time to time at our option.

Net proceeds from this offering were used to repay a portion of the outstanding indebtedness under the Encina

Credit Facility, make investments in middle-market companies (including investments made through our SBIC Subsidiaries) in accordance

with our investment objective and strategies and for general corporate purposes.

Financing costs of $2.0 million related to the 8.50%

2028 Notes have been capitalized and are being amortized over the term of the 8.50% 2028 Notes.

The 8.50% 2028 Notes are listed on the

NYSE under the trading symbol “SAZ” with a par value of $25.00 per note.

At February 28, 2026, the total amount of 8.50%

2028 Notes outstanding was $57.5 million.

7.25% 2030 Notes

On January 23, 2026, we issued $50.0 million

in aggregate principal amount of 7.25% fixed-rate notes due 2030 (the “7.25% 2030 Notes”) for net proceeds of approximately

$48.8 million, based on an offering price of 99.117% per Note, and after deducting the placement agent fee and estimated offering expenses

of approximately $0.8 million.

Interest on the 7.25% 2030 Notes is paid semi-annually in arrears on May 1 and November 1, at a rate of

7.25% per year, commencing on May 1, 2026.

The 7.25% 2030 Notes will mature on May 1, 2030 and may be redeemed in whole or in part

at the Company’s option at any time prior to January 23, 2028 at par plus a “make-whole” premium, and thereafter at

Net proceeds from this offering were used to pay off the Company’s outstanding 4.375% 2026 Notes and for general corporate

Financing costs of $0.03 million related to the 7.25% 2030 Notes have been capitalized and are being amortized over the term

of the 7.25% 2030 Notes.

As of February 28, 2026, the total amount of

7.25% 2030 Notes outstanding was $50.0 million.

7.50% 2031 Notes

On February 6, 2026, we issued $100.0 million

in aggregate principal amount of 7.50% fixed-rate notes due 2031 (the “7.50% 2031 Notes”) for net proceeds were approximately

$96.7 million, after deducting the underwriting commission of approximately $3.1 million and estimated offering costs of approximately

$0.2 million.

Interest on the 7.50% 2031 Notes is paid quarterly in arrears on February 28, May 31, August 31 and November 30, at a rate

of 7.50% per year, commencing May 31, 2026.

The 7.50% 2031 Notes mature on February 6, 2031 and, commencing February 6, 2028, may be

redeemed in whole or in part at any time or from time to time at our option.

Net proceeds from this offering, together with available

cash, were used to pay off the outstanding 4.375% 2026 Notes at maturity on February 28, 2026.

Financing costs of $0.04 million related

to the 7.50% 2031 Notes have been capitalized and are being amortized over the term of the 7.50% 2031 Notes.

The 7.50% 2031 Notes are

listed on the NYSE under the trading symbol “SAV” with a par value of $25.00 per note.

As of February 28, 2026, the total amount of 7.50% 2031

Notes outstanding was $100.0 million.

Our asset coverage ratio, as defined in the 1940

Act, was 168.4% as of February 28, 2026 and 162.9% as of February 28, 2025.

At February 28, 2026 and February 28, 2025, the

fair value of total cash and cash equivalents, cash and cash equivalents in reserve accounts and total investments by major category are

fair value of total cash and cash equivalents, cash and cash equivalents in reserve accounts and total investments by major category

are as follows:

February 28, 2026

February 28, 2025

Percentage of Total

($ in thousands)

4 unchanged sentences

Structured finance securities

Unsecrued loan

Unsecured loan

Equity interests

10 unchanged sentences

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

During the three months and

year ended February 28, 2025 we did not purchase any shares of common stock pursuant to the Share Repurchase Plan.

During the three months

and year ended February 28, 2026 we purchased 2,495 shares of common stock, at the average price of $21.75 for approximately $0.1 million

pursuant to the Share Repurchase Plan.

Public Equity Offering

On July 13, 2018, we issued 1,150,000 shares of

common stock priced at $25.00 per share (par value $0.001 per share) at an aggregate total of $28.75 million.

On July 13, 2018, we issued 1,150,000 shares

of common stock priced at $25.00 per share (par value $0.001 per share) at an aggregate total of $28.75 million.

The net proceeds, after deducting

2 unchanged sentences

Equity ATM Program

On March 16, 2017, we entered into an equity distribution

agreement with Ladenburg Thalmann & Co.

Inc., through which we may offer for sale, from time to time, up to $30.0 million of our common

stock through an ATM offering.

Subsequent to this, we amended our equity distribution agreement to add BB&T Capital Markets and B.

On March 16, 2017, we entered into an equity

distribution agreement with Ladenburg Thalmann & Co.

Inc., through which we may offer for sale, from time to time, up to $30.0 million

of our common stock through an ATM offering.

Subsequent to this, we amended our equity distribution agreement to add BB&T Capital

Markets and B.

Riley FBR, Inc.

as sales agents in our ATM offering.

On July 11, 2019, the amount of the common stock to be offered was increased to $70.0

million, and on October 8, 2019, the amount of the common stock to be offered was increased to $130.0 million.

This agreement was terminated

as of July 29, 2021, and as of that date, we had sold 3,922,018 shares for gross proceeds of $97.1 million at an average price of $24.77

for aggregate net proceeds of $95.9 million (net of transaction costs).

On July 11, 2019, the amount of the common stock to be offered was

increased to $70.0 million, and on October 8, 2019, the amount of the common stock to be offered was increased to $130.0 million.

agreement was terminated as of July 29, 2021, and as of that date, we had sold 3,922,018 shares for gross proceeds of $97.1 million at

an average price of $24.77 for aggregate net proceeds of $95.9 million (net of transaction costs).

On July 30, 2021, we entered into an equity distribution

6 unchanged sentences

Agreement to increase the maximum amount of shares of our common stock to be sold through the ATM Program to $300.0 million from $150.0

On July 19, 2023, we amended the Equity Distribution Agreement to add an additional distribution agent, Raymond James & Associates,

On July 19, 2023, we amended the Equity Distribution Agreement to add an additional distribution agent, Raymond James &

Associates, Inc.

(“Raymond James”).

On May 15, 2024, we amended the Equity Distribution Agreement to add an additional distribution agent,

Lucid Capital Markets, LLC (“Lucid” and together with Ladenburg, Compass Point, and Raymond James, the “Agents”).

On May 15, 2024, we amended the Equity Distribution Agreement to add an additional distribution

agent, Lucid Capital Markets, LLC (“Lucid” and together with Ladenburg, Compass Point, and Raymond James, the “Agents”).

The sales price per share of our common stock offered under the ATM Program, less the Agents’ commission, will not be less than

1 unchanged sentence

Consistent with the terms of the ATM Program, the Manager may, from time

to time and in its sole discretion, contribute proceeds necessary to ensure that no sales are made at a price below the then-current NAV

to time and in its sole discretion, contribute proceeds necessary to ensure that no sales are made at a price below the then-current

NAV per share.

As of February 28, 2026 we sold 8,591,915 shares

for gross proceeds of $207.9 million at an average price of $26.37 for aggregate net proceeds of $206.1 million (net of transaction costs).

During the three months ended February 28, 2025, we sold 1,192,400 shares for gross proceeds of $32.4 million at an average price of $26.99

for aggregate net proceeds of $32.2 million (net of transaction costs).

During the year ended February 28, 2025, we sold 1,300,838 shares

for gross proceeds of $35.4 million at an average price of $26.99 for aggregate net proceeds of $35.1 million (net of transaction costs).

The Manager agreed to reimburse the Company to the extent the per share price of the shares to the public, less underwriting fees, was

less than net asset value per share.

For the three months ended February 28, 2025, the Manager reimbursed the Company $2.2 million.

the year ended February 28, 2025, the Manager reimbursed the Company $2.4 million.

for gross proceeds of $227.2 million at an average price of $26.37 per share for aggregate net proceeds of $225.4 million (net of transaction

During the three months ended February 28, 2026, we sold zero shares for gross proceeds of $0.0 million at an average price of

$0.0 per share for aggregate net proceeds of $0.0 million (net of transaction costs).

During the year ended February 28, 2026, we sold

747,199 shares for gross proceeds of $19.3 million at an average price of $25.83 per share for aggregate net proceeds of $19.3 million

(net of transaction costs).

The Manager agreed to reimburse the Company to the extent the per share price of the shares to the public,

less underwriting fees, was less than net asset value per share.

For the three months ended February 28, 2026, the Manager reimbursed

the Company $0.0 million.

For the year ended February 28, 2026, the Manager reimbursed the Company $0.6 million.

Dividend Distributions

9 unchanged sentences

28, 2027 to inception were as follows:

Cash Dividend

Tax Year February 28, 2027

April 23, 2026

March 19, 2026

Tax Year Ended February 28, 2026

February 23, 2026

January 22, 2026

December 18, 2025

November 20, 2025

October 23, 2025

September 24, 2025

August 21, 2025

July 24, 2025

June 24, 2025

35 unchanged sentences

March 26, 2018

Cash Dividend

Tax Year Ended February 28, 2018

29 unchanged sentences

common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on

a price of $23.11 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on March 17,

The number of shares of common stock comprising the stock portion was calculated based

on a price of $23.11 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on March

17, 20, 21, 22, 23, 24, 27, 28, 29, and 30, 2023.

Based on shareholder elections, the dividend consisted of approximately $6.8 million in cash and 53,615 newly issued shares of common stock, or 0.5% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $24.26 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on December 20, 21, 22, 23, 27, 28, 29 and 30 2022 and January 3 and 4, 2023.

Based on shareholder elections, the dividend consisted of approximately $5.3 million in cash and 52,312 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.00 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on September 16, 19, 20, 21, 22, 23, 26, 27, 28 and 29, 2022.

Based on shareholder elections, the dividend consisted of approximately $5.1 million in cash and 48,590 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.40 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on June 15, 16, 17, 21, 22, 23, 24, 27, 28 and 29, 2022.

Based on shareholder elections, the dividend consisted of approximately $5.3 million in cash and 42,825 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $25.89 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on March 15, 16, 17, 18, 21, 22, 23, 24, 25 and 28, 2022.

Based on shareholder elections, the dividend consisted of approximately $5.3 million in cash and 41,520 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $26.85 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on January 5, 6, 7, 10, 11, 12, 13, 14, 18 and 19, 2022.

Based on shareholder elections, the dividend consisted of approximately $4.9 million in cash and 38,016 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $26.77 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on September 15, 16, 17, 20, 21, 22, 23, 24, 27 and 28, 2021.

Based on shareholder elections, the dividend consisted of approximately $4.1 million in cash and 33,100 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $25.03 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on June 16, 17, 18, 21, 22, 23, 24, 25, 28 and 29, 2021.

Based on shareholder elections, the dividend consisted of approximately $3.9 million in cash and 38,580 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $23.69 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on April 9,12, 13, 14, 15, 16, 19, 20, 21 and 22, 2021.

Based on shareholder elections, the dividend consisted of approximately $3.8 million in cash and 41,388 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $21.75 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on January 28, 29 and February 1, 2, 3, 4, 5, 8, 9 and 10, 2021.

Based on shareholder elections, the dividend consisted of approximately $3.8 million in cash and 45,706 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $17.63 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on October 28, 29, 30 and November 2, 3, 4, 5, 6, 9 and 10, 2020.

Based on shareholder elections, the dividend consisted of approximately $3.7 million in cash and 47,098 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $16.45 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on July 30, 31 and August 3, 4, 5, 6, 7, 10, 11 and 12, 2020.

Based on shareholder elections, the dividend consisted of approximately $5.4 million in cash and 35,682 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $25.44 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on January 24, 27, 28, 29, 30, 31 and February 3, 4, 5 and 6, 2020.

Based on shareholder elections, the dividend consisted of approximately $4.5 million in cash and 34,575 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $23.34 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on September 13, 16, 17, 18, 19, 20, 23, 24, 25 and 26, 2019.

Based on shareholder elections, the dividend consisted of approximately $3.6 million in cash and 31,545 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.65 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on June 14, 17, 18, 19, 20, 21, 24, 25, 26 and 27, 2019.

Based on shareholder elections, the dividend consisted of approximately $3.5 million in cash and 31,240 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $21.36 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on March 15, 18, 19, 20, 21, 22, 25, 26, 27 and 28, 2019.

Based on shareholder elections, the dividend consisted of approximately $3.4 million in cash and 30,796 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $18.88 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on December 18, 19, 20, 21, 24, 26, 27, 28, 31, 2018 and January 2, 2019.

Based on shareholder elections, the dividend consisted of approximately $3.3 million in cash and 25,862 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.35 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on September 14, 17, 18, 19, 20, 21, 24, 25, 26 and 27, 2018.

Based on shareholder elections, the dividend consisted of approximately $2.7 million in cash and 21,562 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $23.72 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on June 14, 15, 18, 19, 20, 21, 22, 25, 26 and 27, 2018.

Based on shareholder elections, the dividend consisted of approximately $2.6 million in cash and 25,354 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $19.91 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on March 13, 14, 15, 16, 19, 20, 21, 22, 23 and 26, 2018.

Based on shareholder elections, the dividend consisted of approximately $2.5 million in cash and 25,435 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $21.14 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on December 13, 14, 15, 18, 19, 20, 21, 22, 26 and 27, 2017.

Based on shareholder elections, the dividend consisted of approximately $2.2 million in cash and 33,551 newly issued shares of common stock, or 0.6% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $20.19 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on September 13, 14, 15, 18, 19, 20, 21, 22, 25 and 26, 2017.

Based on shareholder elections, the dividend consisted of approximately $2.3 million in cash and 26,222 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $20.04 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on June 14, 15, 16, 19, 20, 21, 22, 23, 26 and 27, 2017.

Based on shareholder elections, the dividend consisted of approximately $2.0 million in cash and 29,096 newly issued shares of common stock, or 0.5% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $21.38 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on March 15, 16, 17, 20, 21, 22, 23, 24, 27 and 28, 2017.

Based on shareholder elections, the dividend consisted of approximately $1.6 million in cash and 50,453 newly issued shares of common stock, or 0.9% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $20.25 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on January 27, 30, 31 and February 1, 2, 3, 6, 7, 8 and 9, 2017.

Based on shareholder elections, the dividend consisted of approximately $1.5 million in cash and 58,548 newly issued shares of common stock, or 1.0% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $17.12 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on October 27, 28, 31 and November 1, 2, 3, 4, 7, 8 and 9, 2016.

Based on shareholder elections, the dividend consisted of approximately $0.7 million in cash and 24,786 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $17.06 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on August 22, 23, 24, 25, 26, 29, 30, 31 and September 1 and 2, 2016.

Based on shareholder elections, the dividend consisted of approximately $1.5 million in cash and 58,167 newly issued shares of common stock, or 1.0% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $16.32 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on July 27, 28, 29 and August 1, 2, 3, 4, 5, 8 and 9, 2016.

Based on shareholder elections, the dividend consisted of approximately $1.5 million in cash and 56,728 newly issued shares of common stock, or 1.0% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $15.43 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on April 14, 15, 18, 19, 20, 21, 22, 25, 26 and 27, 2016.

Based on shareholder elections, the dividend consisted of approximately $1.4 million in cash and 66,765 newly issued shares of common stock, or 1.2% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $13.11 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on February 16, 17, 18, 19, 22, 23, 24, 25, 26 and 29, 2016.

Based on shareholder elections, the dividend consisted of approximately $1.1 million in cash and 61,029 newly issued shares of common stock, or 1.1% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $14.53 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on November 16, 17, 18, 19, 20, 23, 24, 25, 27 and 30, 2015.

Based on shareholder elections, the dividend consisted of approximately $1.1 million in cash and 47,861 newly issued shares of common stock, or 0.9% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $15.28 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on August 18, 19, 20, 21, 24, 25, 26, 27, 28 and 31, 2015.

Based on shareholder elections, the dividend consisted of approximately $3.4 million in cash and 126,230 newly issued shares of common stock, or 2.3% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $16.47 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on May 22, 26, 27, 28, 29 and June 1, 2, 3, 4, and 5, 2015.

Based on shareholder elections, the dividend consisted of approximately $0.9 million in cash and 33,766 newly issued shares of common stock, or 0.6% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $16.78 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on May 15, 18, 19, 20, 21, 22, 26, 27, 28 and 29, 2015.

Based on shareholder elections, the dividend consisted of approximately $0.8 million in cash and 26,858 newly issued shares of common stock, or 0.5% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $14.97 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on February 13, 17, 18, 19, 20, 23, 24, 25, 26 and 27, 2015.

Based on shareholder elections, the dividend consisted of approximately $0.6 million in cash and 22,283 newly issued shares of common stock, or 0.4% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $14.37 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on November 14, 17, 18, 19, 20, 21, 24, 25, 26 and 28, 2014.

Based on shareholder elections, the dividend consisted of approximately $2.5 million in cash and 649,500 shares of common stock, or 13.7% of our outstanding common stock prior to the dividend payment.

The amount of cash elected to be received was greater than the cash limit of 20.0% of the aggregate dividend amount, thus resulting in the payment of a combination of cash and stock to shareholders who elected to receive cash.

The number of shares of common stock comprising the stock portion was calculated based on a price of $15.439 per share, which equaled the volume weighted average trading price per share of the common stock on December 11, 13 and 16, 2013.

Based on shareholder elections, the dividend consisted of $3.3 million in cash and 853,455 shares of common stock, or 22.0% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $15.444 per share, which equaled the volume weighted average trading price per share of the common stock on December 14, 17 and 19, 2012.

Based on shareholder elections, the dividend consisted of $2.0 million in cash and 599,584 shares of common stock, or 18.0% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $13.117067 per share, which equaled the volume weighted average trading price per share of the common stock on December 20, 21 and 22, 2011.

Based on shareholder elections, the dividend consisted of $1.2 million in cash and 596,235 shares of common stock, or 22.0% of our outstanding common stock prior to the dividend payment.

The amount of cash elected to be received was greater than the cash limit of 10.0% of the aggregate dividend amount, thus resulting in the payment of a combination of cash and stock to shareholders who elected to receive cash.

The number of shares of common stock comprising the stock portion was calculated based on a price of $17.8049 per share, which equaled the volume weighted average trading price per share of the common stock on December 20, 21 and 22, 2010.

Based on shareholder elections, the dividend consisted of $2.1 million in cash and 864,872 shares of common stock, or 104.0% of our outstanding common stock prior to the dividend payment.

The amount of cash elected to be received was greater than the cash limit of 13.7% of the aggregate dividend amount, thus resulting in the payment of a combination of cash and stock to shareholders who elected to receive cash.

The number of shares of common stock comprising the stock portion was calculated based on a price of $1.5099 per share, which equaled the volume weighted average trading price per share of the common stock on December 24 and 28, 2009.

Based on shareholder elections, the dividend consisted of approximately $7.6 million in cash and 29,627 newly issued shares of common stock, or 0.2% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $25.29 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on June 15, 16, 20, 21, 22, 23, 26, 27, 28, and 29, 2023.

Based on shareholder elections, the dividend consisted of approximately $8.4 million in cash and 35,196 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $24.41 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on September 15, 18, 19, 20, 21, 22, 25, 26, 27, and 28, 2023.

Based on shareholder elections, the dividend consisted of approximately $8.9 million in cash and 37,394 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $24.47 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on December 14, 15, 18, 19, 20, 21, 22, 26, 27, and 28, 2023.

Based on shareholder elections, the dividend consisted of approximately

$9.0 million in cash and 45,490 newly issued shares of common stock, or 0.3% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.85 per share, which equaled 95%

of the volume weighted average trading price per share of the common stock on March 15, 18, 19, 20, 21, 22, 25, 26, 27, and 28, 2024.

Based on shareholder elections, the dividend consisted of approximately

$9.1 million in cash and 46,803 newly issued shares of common stock, or 10.0% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $21.76 per share, which equaled 95%

of the volume weighted average trading price per share of the common stock on June 13, 14, 17, 18, 20, 21, 24, 25, 26, and 27, 2024.

Based on shareholder elections, the dividend consisted of approximately

$9.0 million in cash and 54,999 newly issued shares of common stock, or 10.0% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.08 per share, which equaled 95%

of the volume weighted average trading price per share of the common stock on September 13, 16, 17, 18, 19, 20, 23, 24, 25, and 26, 2024.

Based on shareholder elections, the dividend consisted

of approximately $6.8 million in cash and 53,615 newly issued shares of common stock, or 0.5% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $24.26

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on December 20, 21, 22, 23,

27, 28, 29 and 30 2022 and January 3 and 4, 2023.

Based on shareholder elections, the dividend consisted

of approximately $5.3 million in cash and 52,312 newly issued shares of common stock, or 0.4% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.00

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on September 16, 19, 20,

21, 22, 23, 26, 27, 28 and 29, 2022.

Based on shareholder elections, the dividend consisted

of approximately $5.1 million in cash and 48,590 newly issued shares of common stock, or 0.4% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.40

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on June 15, 16, 17, 21, 22,

23, 24, 27, 28 and 29, 2022.

Based on shareholder elections, the dividend consisted

of approximately $5.3 million in cash and 42,825 newly issued shares of common stock, or 0.4% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $25.89

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on March 15, 16, 17, 18,

21, 22, 23, 24, 25 and 28, 2022.

Based on shareholder elections, the dividend consisted

of approximately $5.3 million in cash and 41,520 newly issued shares of common stock, or 0.3% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $26.85

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on January 5, 6, 7, 10, 11,

12, 13, 14, 18 and 19, 2022.

Based on shareholder elections, the dividend consisted

of approximately $4.9 million in cash and 38,016 newly issued shares of common stock, or 0.3% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $26.77

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on September 15, 16, 17,

20, 21, 22, 23, 24, 27 and 28, 2021.

Based on shareholder elections, the dividend consisted

of approximately $4.1 million in cash and 33,100 newly issued shares of common stock, or 0.3% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $25.03

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on June 16, 17, 18, 21, 22,

23, 24, 25, 28 and 29, 2021.

Based on shareholder elections, the dividend consisted

of approximately $3.9 million in cash and 38,580 newly issued shares of common stock, or 0.3% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $23.69

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on April 9,12, 13, 14, 15,

16, 19, 20, 21 and 22, 2021.

Based on shareholder elections, the dividend consisted

of approximately $3.8 million in cash and 41,388 newly issued shares of common stock, or 0.4% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $21.75

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on January 28, 29 and February

1, 2, 3, 4, 5, 8, 9 and 10, 2021.

Based on shareholder elections, the dividend consisted

of approximately $3.8 million in cash and 45,706 newly issued shares of common stock, or 0.4% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $17.63

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on October 28, 29, 30 and

November 2, 3, 4, 5, 6, 9 and 10, 2020.

Based on shareholder elections, the dividend consisted

of approximately $3.7 million in cash and 47,098 newly issued shares of common stock, or 0.4% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $16.45

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on July 30, 31 and August

3, 4, 5, 6, 7, 10, 11 and 12, 2020.

Based on shareholder elections, the dividend consisted

of approximately $5.4 million in cash and 35,682 newly issued shares of common stock, or 0.3% of our outstanding common stock

prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price

of $25.44 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on January 24,

27, 28, 29, 30, 31 and February 3, 4, 5 and 6, 2020.

Based on shareholder elections, the dividend consisted

of approximately $4.5 million in cash and 34,575 newly issued shares of common stock, or 0.4% of our outstanding common stock

prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price

of $23.34 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on September 13,

16, 17, 18, 19, 20, 23, 24, 25 and 26, 2019.

Based on shareholder elections, the dividend consisted

of approximately $3.6 million in cash and 31,545 newly issued shares of common stock, or 0.4% of our outstanding common stock

prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price

of $22.65 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on June 14,

17, 18, 19, 20, 21, 24, 25, 26 and 27, 2019.

Based on shareholder elections, the dividend consisted

of approximately $3.5 million in cash and 31,240 newly issued shares of common stock, or 0.4% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $21.36

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on March 15, 18, 19, 20,

21, 22, 25, 26, 27 and 28, 2019.

Based on shareholder elections, the dividend consisted

of approximately $3.4 million in cash and 30,796 newly issued shares of common stock, or 0.4% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $18.88

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on December 18, 19, 20,

21, 24, 26, 27, 28, 31, 2018 and January 2, 2019.

Based on shareholder elections, the dividend consisted

of approximately $3.3 million in cash and 25,862 newly issued shares of common stock, or 0.3% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.35

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on September 14, 17, 18,

19, 20, 21, 24, 25, 26 and 27, 2018.

Based on shareholder elections, the dividend consisted

of approximately $2.7 million in cash and 21,562 newly issued shares of common stock, or 0.3% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $23.72

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on June 14, 15, 18, 19,

20, 21, 22, 25, 26 and 27, 2018.

Based on shareholder elections, the dividend consisted

of approximately $2.6 million in cash and 25,354 newly issued shares of common stock, or 0.4% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $19.91

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on March 13, 14, 15, 16,

19, 20, 21, 22, 23 and 26, 2018.

Based on shareholder elections, the dividend consisted

of approximately $2.5 million in cash and 25,435 newly issued shares of common stock, or 0.4% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $21.14

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on December 13, 14, 15,

18, 19, 20, 21, 22, 26 and 27, 2017.

Based on shareholder elections, the dividend consisted

of approximately $2.2 million in cash and 33,551 newly issued shares of common stock, or 0.6% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $20.19

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on September 13, 14, 15,

18, 19, 20, 21, 22, 25 and 26, 2017.

Based on shareholder elections, the dividend consisted

of approximately $2.3 million in cash and 26,222 newly issued shares of common stock, or 0.4% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $20.04

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on June 14, 15, 16, 19,

20, 21, 22, 23, 26 and 27, 2017.

Based on shareholder elections, the dividend consisted

of approximately $2.0 million in cash and 29,096 newly issued shares of common stock, or 0.5% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $21.38

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on March 15, 16, 17, 20,

21, 22, 23, 24, 27 and 28, 2017.

Based on shareholder elections, the dividend consisted

of approximately $1.6 million in cash and 50,453 newly issued shares of common stock, or 0.9% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $20.25

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on January 27, 30, 31 and

February 1, 2, 3, 6, 7, 8 and 9, 2017.

Based on shareholder elections, the dividend consisted

of approximately $1.5 million in cash and 58,548 newly issued shares of common stock, or 1.0% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $17.12

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on October 27, 28, 31 and

November 1, 2, 3, 4, 7, 8 and 9, 2016.

Based on shareholder elections, the dividend consisted

of approximately $0.7 million in cash and 24,786 newly issued shares of common stock, or 0.4% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $17.06

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on August 22, 23, 24, 25,

26, 29, 30, 31 and September 1 and 2, 2016.

Based on shareholder elections, the dividend consisted

of approximately $1.5 million in cash and 58,167 newly issued shares of common stock, or 1.0% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $16.32

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on July 27, 28, 29 and

August 1, 2, 3, 4, 5, 8 and 9, 2016.

Based on shareholder elections, the dividend consisted

of approximately $1.5 million in cash and 56,728 newly issued shares of common stock, or 1.0% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $15.43

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on April 14, 15, 18, 19,

20, 21, 22, 25, 26 and 27, 2016.

Based on shareholder elections, the dividend consisted

of approximately $1.4 million in cash and 66,765 newly issued shares of common stock, or 1.2% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $13.11

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on February 16, 17, 18,

19, 22, 23, 24, 25, 26 and 29, 2016.

Based on shareholder elections, the dividend consisted

of approximately $1.1 million in cash and 61,029 newly issued shares of common stock, or 1.1% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $14.53

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on November 16, 17, 18,

19, 20, 23, 24, 25, 27 and 30, 2015.

Based on shareholder elections, the dividend consisted

of approximately $1.1 million in cash and 47,861 newly issued shares of common stock, or 0.9% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $15.28

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on August 18, 19, 20, 21,

24, 25, 26, 27, 28 and 31, 2015.

Based on shareholder elections, the dividend consisted

of approximately $3.4 million in cash and 126,230 newly issued shares of common stock, or 2.3% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $16.47

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on May 22, 26, 27, 28,

29 and June 1, 2, 3, 4, and 5, 2015.

Based on shareholder elections,

the dividend consisted of approximately $0.9 million in cash and 33,766 newly issued shares of common stock, or 0.6% of our outstanding

common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based

on a price of $16.78 per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on

May 15, 18, 19, 20, 21, 22, 26, 27, 28 and 29, 2015.

Based on shareholder elections, the dividend consisted

of approximately $0.8 million in cash and 26,858 newly issued shares of common stock, or 0.5% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $14.97

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on February 13, 17, 18,

19, 20, 23, 24, 25, 26 and 27, 2015.

Based on shareholder elections, the dividend consisted

of approximately $0.6 million in cash and 22,283 newly issued shares of common stock, or 0.4% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $14.37

per share, which equaled 95.0% of the volume weighted average trading price per share of the common stock on November 14, 17, 18,

19, 20, 21, 24, 25, 26 and 28, 2014.

Based on shareholder elections, the dividend consisted

of approximately $2.5 million in cash and 649,500 shares of common stock, or 13.7% of our outstanding common stock prior to the dividend

The amount of cash elected to be received was greater than the cash limit of 20.0% of the aggregate dividend amount, thus

resulting in the payment of a combination of cash and stock to shareholders who elected to receive cash.

The number of shares of

common stock comprising the stock portion was calculated based on a price of $15.439 per share, which equaled the volume weighted

average trading price per share of the common stock on December 11, 13 and 16, 2013.

Based on shareholder elections, the dividend consisted

of $3.3 million in cash and 853,455 shares of common stock, or 22.0% of our outstanding common stock prior to the dividend payment.

The amount of cash elected to be received was greater than the cash limit of 20.0% of the aggregate dividend amount, thus resulting

in the payment of a combination of cash and stock to shareholders who elected to receive cash.

The number of shares of common stock

comprising the stock portion was calculated based on a price of $15.444 per share, which equaled the volume weighted average trading

price per share of the common stock on December 14, 17 and 19, 2012.

Based on shareholder elections, the dividend consisted

of $2.0 million in cash and 599,584 shares of common stock, or 18.0% of our outstanding common stock prior to the dividend payment.

The amount of cash elected to be received was greater than the cash limit of 20.0% of the aggregate dividend amount, thus resulting

in the payment of a combination of cash and stock to shareholders who elected to receive cash.

The number of shares of common stock

comprising the stock portion was calculated based on a price of $13.117067 per share, which equaled the volume weighted average trading

price per share of the common stock on December 20, 21 and 22, 2011.

Based on shareholder elections, the dividend consisted

of $1.2 million in cash and 596,235 shares of common stock, or 22.0% of our outstanding common stock prior to the dividend payment.

The amount of cash elected to be received was greater than the cash limit of 10.0% of the aggregate dividend amount, thus resulting

in the payment of a combination of cash and stock to shareholders who elected to receive cash.

The number of shares of common stock

comprising the stock portion was calculated based on a price of $17.8049 per share, which equaled the volume weighted average trading

price per share of the common stock on December 20, 21 and 22, 2010.

Based on shareholder elections, the dividend consisted

of $2.1 million in cash and 864,872 shares of common stock, or 104.0% of our outstanding common stock prior to the dividend payment.

The amount of cash elected to be received was greater than the cash limit of 13.7% of the aggregate dividend amount, thus resulting

in the payment of a combination of cash and stock to shareholders who elected to receive cash.

The number of shares of common stock

comprising the stock portion was calculated based on a price of $1.5099 per share, which equaled the volume weighted average trading

price per share of the common stock on December 24 and 28, 2009.

Based on shareholder elections, the dividend consisted

of approximately $7.6 million in cash and 29,627 newly issued shares of common stock, or 0.2% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $25.29

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on June 15, 16, 20, 21, 22,

23, 26, 27, 28, and 29, 2023.

Based on shareholder elections, the dividend consisted

of approximately $8.4 million in cash and 35,196 newly issued shares of common stock, or 0.3% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $24.41

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on September 15, 18, 19,

20, 21, 22, 25, 26, 27, and 28, 2023.

Based on shareholder elections, the dividend consisted

of approximately $8.9 million in cash and 37,394 newly issued shares of common stock, or 0.3% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $24.47

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on December 14, 15, 18, 19,

20, 21, 22, 26, 27, and 28, 2023.

Based on shareholder elections, the dividend consisted

of approximately $9.0 million in cash and 45,490 newly issued shares of common stock, or 0.3% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.85

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on March 15, 18, 19, 20,

21, 22, 25, 26, 27, and 28, 2024.

Based on shareholder elections, the dividend consisted

of approximately $9.1 million in cash and 46,803 newly issued shares of common stock, or 10.0% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $21.76

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on June 13, 14, 17, 18, 20,

21, 24, 25, 26, and 27, 2024.

Based on shareholder elections, the dividend consisted

of approximately $9.0 million in cash and 54,999 newly issued shares of common stock, or 10.0% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.08

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on September 13, 16, 17,

18, 19, 20, 23, 24, 25, and 26, 2024.

Based on shareholder elections, the dividend consisted

of approximately $13.7 million in cash and 81,471 newly issued shares of common stock, or 11.9% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.80

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on December 6, 9, 10, 11,

12, 13, 16, 17, 18, and 19, 2024.

Based on shareholder elections, the dividend consisted of approximately $9.9 million in cash and

60,611 newly issued shares of common stock, or 12.3% of our outstanding common stock prior to the dividend payment.

The number of

shares of common stock comprising the stock portion was calculated based on a price of $22.96 per share, which equaled 95% of the

volume weighted average trading price per share of the common stock on March 12, 13, 14, 17, 18, 19, 20, 21, 24, and 25, 2025.

Based on shareholder elections, the dividend consisted of approximately $3.4 million in cash and

20,086 newly issued shares of common stock, or 11.5% of our outstanding common stock prior to the dividend payment.

The number of

shares of common stock comprising the stock portion was calculated based on a price of $22.02 per share, which equaled 95% of the

volume weighted average trading price per share of the common stock on April 10, 11, 14, 15, 16, 17, 21, 22, 23, and 24, 2025.

Based on shareholder elections, the dividend consisted of approximately

$13.7 million in cash and 81,471 newly issued shares of common stock, or 11.9% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.80 per share, which equaled 95%

of the volume weighted average trading price per share of the common stock on December 6, 9, 10, 11, 12, 13, 16, 17, 18, and 19, 2024.

$3.4 million in cash and 20,784 newly issued shares of common stock, or 12.5% of our outstanding common stock prior to the dividend

The number of shares of common stock comprising the stock portion was calculated based on a price of $23.02 per share, which

equaled 95% of the volume weighted average trading price per share of the common stock on May 9, 12, 13, 14, 15, 16, 19, 20, 21,

and 22, 2025.

Based on shareholder elections, the dividend consisted

of approximately $3.4 million in cash and 19,750 newly issued shares of common stock, or 11.7% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $23.09

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on June 10, 11, 12, 13, 16,

17, 18, 20, 23, and 24, 2025.

Based on shareholder elections, the dividend consisted

of approximately $3.5 million in cash and 17,443 newly issued shares of common stock, or 10.6% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $23.86

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on July 11, 14, 15, 16, 17,

18, 21, 22, 23 and 24, 2025.

Based on shareholder elections, the dividend consisted

of approximately $3.6 million in cash and 17,320 newly issued shares of common stock, or 10.5% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $24.11

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on August 8, 11, 12, 13,

14, 15, 18, 19, 20 and 21, 2025.

Based on shareholder elections, the dividend consisted

of approximately $3.6 million in cash and 17,673 newly issued shares of common stock, or 10.3% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $23.32

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on September 11, 12, 15,

16, 17, 18, 19, 22, 23 and 24, 2025.

Based on shareholder elections, the dividend consisted

of approximately $3.6 million in cash and 20,898 newly issued shares of common stock, or 10.9% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $20.97

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on October 10, 13, 14, 15,

16, 17, 20, 21, 22, and 23, 2025.

Based on shareholder elections, the dividend consisted

of approximately $3.6 million in cash and 20,552 newly issued shares of common stock, or 10.7% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $20.99

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on November 7, 10, 11, 12,

13, 14, 17, 18, 19, and 20, 2025.

Based on shareholder elections, the dividend consisted

of approximately $7.2 million in cash and 41,155 newly issued shares of common stock, or 11.1% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $21.85

per share, which equaled 95% of the volume weighted average trading price per share of the common stock on December 5, 8, 9, 10,

11, 12, 15, 16, 17, and 18, 2025.

on shareholder elections, the dividend consisted of approximately $3.6 million in cash and

20,092 newly issued shares of common stock, or 11.0% of our outstanding common stock prior

to the dividend payment.

The number of shares of common stock comprising the stock portion

was calculated based on a price of $22.12 per share, which equaled 95% of the volume weighted

average trading price per share of the common stock on January 8, 9, 12, 13, 14, 15, 16,

20, 21, and 22, 2026.

Based on shareholder elections, the dividend consisted of approximately $3.6 million in cash and 20,049 newly issued shares of common stock, or 10.9% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.96 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on March 12, 13, 14, 17, 18, 19, 20, 21, 24, and 25, 2025.

The number of shares of common stock comprising the stock portion was calculated based on a price of $22.07 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on February 9, 10, 11, 12, 13, 17, 18, 19, 20, and 23, 2026.

on shareholder elections, the dividend consisted of approximately $ 3.6

million in cash and 20,766

newly issued shares of common stock,

or 11.0 % of our outstanding

common stock prior to the dividend payment.

The number of shares of common stock comprising

the stock portion was calculated based on a price of $ 21.45 per

share, which equaled 95% of the volume weighted average trading price per share of the common

stock on March 6, 9, 10, 11, 12, 13, 16, 17, 18, and 19, 2026.

Based on shareholder elections, the dividend consisted of approximately $3.6 million in cash and 22,784 newly issued shares of common stock, or 12.2% of our outstanding common stock prior to the dividend payment.

The number of shares of common stock comprising the stock portion was calculated based on a price of $21.71 per share, which equaled 95% of the volume weighted average trading price per share of the common stock on April 10, 13, 14, 15, 16, 17, 20, 21, 22, and 23, 2026.

These dividends were declared on February 18, 2025, and the cash and

newly issued shares of the common stock will be determined at a future date.

We cannot provide any assurance that these measures will

1 unchanged sentence

Subsequent Events

Company has evaluated subsequent events through the filing of this Form 10-K and determined that there have been no events that have occurred

that would require adjustments to the Company’s consolidated financial statements and disclosures in the consolidated financial

statements as of and for the year ended February 28, 2025.

On March 17, 2026, the Company declared the following

dividends for the quarter ending May 31, 2026.

Shareholders have the option to receive payment of the dividend in cash, or receive shares

of common stock, pursuant to the DRIP.

April 7, 2026

April 23, 2026

June 23, 2026

On April 10, 2026, the Company 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.

on the 7.25% 2029 Notes is paid quarterly on February 28, May 31, August 31 and November 30 of each year, beginning on May 31, 2026.

Notes will mature on April 10, 2029, and may be extended to October 10, 2029, at the sole discretion of the Company.

The Notes may be

redeemed at the Company’s 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.

The Company intends to use the net proceeds from the offering for general corporate purposes

in accordance with the Company’s investment objective and strategies.

Pursuant to the terms of the Notes Purchase Agreement, upon

the mutual agreement of the Company and the Purchaser, the Company may issue additional Notes for sale in one or more subsequent private

offerings by July 10, 2026, in an aggregate amount of up to $25.0 million, resulting in a total maximum issuance of $50.0 million.

In addition, holders of the 7.25% 2029 Notes will have the option to

have the 7.25% 2029 Notes repaid prior to the stated maturity date if (i) the Company is no longer directly managed by Saratoga Investment

Advisors or any of its affiliates, or if two or more of Christian L.

Oberbeck, Michael J.

Grisius, Thomas V.

Inglesby, Charles G.

Steenkamp cease to work or be employed on a full-time basis with respect to the business of Saratoga Investment Advisors at

least the duties and responsibilities delegated to him as of the date of the Seventeenth Supplemental Indenture and has not been promptly

replaced by another person reasonably acceptable by the holders of the Notes;

or (ii) the Company violates Section 18(a)(1)(A) as modified

by Section 61(a)(2) of the 1940 Act as in effect as of the date of the Seventeenth Supplemental Indenture, but giving effect to any exemptive

relief granted to the Company by the SEC.

Contractual obligations

The following table shows our payment obligations for repayment

of debt and other contractual obligations at February 28, 2025:

The following table shows our payment obligations

for repayment of debt and other contractual obligations at February 28, 2026:

Payment Due by Period

Long-Term Debt Obligations

Less Than 1 Year

More Than 5 Years

($ in thousands)

Encina credit facility

Live Oak credit facility

Valley Bank Credit Facility

SBA debentures

7 unchanged sentences

7.50% 2031 Notes

8.125% 2027 Notes

8.50% 2028 Notes

Total Long-Term Debt Obligations

10 unchanged sentences

ActiveProspect, Inc.

Angry Chickz, Inc.

Artemis Wax Corp.

Ascend Software, LLC

C2 Educational Systems

Better Impact USA, Inc.

C2 Educational Systems, Inc

Davisware, LLC

Granite Comfort, LP

Haystack Team Inc.

LFR Chicken LLC

2 unchanged sentences

Saratoga Senior Loan Fund I JV, LLC

Sceptre Hospitality Resources, LLC

Stretch Zone Franchising, LLC

SAI Systems Health, LLC

Source 44 LLC

StockIQ Technologies, LLC

VetnCare MSO, LLC

At portfolio company’s discretion - satisfaction of certain financial and nonfinancial covenants required

Alpha Aesthetics Partners OpCo, LLC

ARC Health OpCo LLC

Angry Chickz, Inc.

Axero Holdings, LLC - Revolver

Axiom Medical Consulting, LLC

Better Impact USA, Inc.

BQE Software, Inc.

C2 Educational Systems

Cloudpermit Intermediate Holding Company

Breezeway Homes, Inc.

Davisware, LLC

3 unchanged sentences

Innergy, Inc.

Inspect Point Holding, LLC

Inspect Point Holdings, LLC

LFR Chicken LLC

Modis Dental Partners OpCo, LLC

Pepper Palace, Inc.

SAI Systems Health, LLC

SmartAC.com, Inc.

Source 44 LLC

Source 44 LLC - Revolver

StockIQ Technologies, LLC

Stretch Zone Franchising, LLC

3 unchanged sentences

As of February 28, 2026, we had cash and cash equivalents of $1.7 million, $52.5 million in available

borrowings under the Encina Credit Facility and $55.0 million in available borrowings under the Live Oak Credit Facility.

borrowings under the Valley Credit Facility and $37.5 million in available borrowings under the Live Oak Credit Facility.

$99.0 million available SBA debentures that can be used for any commitments held in SBIC III LP.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis